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There is a sweeping wave across Europe and America acknowledging the advantages of DLTs and their products as cryptocurrencies. States as Texas, Wyoming and New Hampshire don’t accept Bitcoin and cryptocurrencies as money—not yet, but property whose gains are subject to taxes.

Read: Jake Chervinsky Says Bill Exempting Crypto from Securities Laws Will Take Time to be Approved

Aside from Wyoming, New Hampshire and Indiana may follow the Wyoming route and by 2020, they may have an arrangement with a third party where businesses can pay their taxes in BTC straight to the State’s treasurer. This is interesting and although it is not express, there are hints that cryptocurrencies are no longer tools for money laundering and other vices. As investors set their eyes on the SEC, Italy is one step away from rolling out a decree that will guide the interpretation of crypto assets and their use.

The Decreto Semplificazioni got the approval of the Italian Senate Committee of Constitutional Affairs and Public Works on Wednesday last week and once the decrees set out in the document has the final approval from the Chamber of Deputies and the Senate of the Republic, then it will be all systems go.

Also Read: Weiss Ratings Gives Five Reasons Why Bitcoin’s Fundamentals Are Stronger than Ever for Adoption

If anything, different government sectors will make use of the inherent properties specific to blockchains such as time stamping which the decree said can be used to legitimize official documents and contracts.

In the meantime, BTC is down 6.8 percent at the time of press. Unfortunately, it seems like the path of least resistance is southwards and part of this is today’s bear candlestick that sparks from a sell-off during the Asian session.

While we remain overly bullish and expecting prices to recover in coming days, BTC prices are at a periphery, at an edge and could at any time collapse under immense sell pressure of the last 24 hours confirming strong losses of Jan 10.

Note that, prices are hovering at the 78.6 percent Fibonacci retracement level at $3,500 which is not only a vital level as BTC/USD price action is concerned but because the level marks the lower limit of our support zone as laid out in a previous analysis.

Going forward, it will be imperative for traders to take note and realize that the temporary withdrawal of Bitcoin ETF could be deflating but at the same time, candlestick arrangement isn’t supportive of BTC bulls. The fact that we are in a temporary bull run thanks to late Dec—early Jan higher highs doesn’t mean sellers can step up and reverse those gains.

We recommend caution and from an effort versus result approach, buyers would be back in contention once there are solid gains above $4,500 recovering losses of Jan 10 as prices rally above $4,500 sparking a buying frenzy that will eventually push prices towards $6,000. If this isn’t the case and prices tumble below $3,500 in the coming days, then we may see an inevitable sell off with first targets at $3,200.

All Charts Courtesy of Trading View – BitFinex

Disclaimer: Opinions are those of the author. Do your Research.

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