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Markets Update: Crypto Prices Begin to Slump as the New Year Approaches

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Most cryptocurrencies took a hit on Christmas Day, losing between 5-10% after having a decent run of solid gains last week. Some traders had assumed digital asset markets would be rather dull during the holidays, but the correction was deep and fast. At the moment, the entire cryptocurrency economy is worth $126 billion as traders are curiously waiting for the next big move.

Also read: Year in Review: 2018’s Top Cryptocurrency Stories

Crypto Markets Show It’s Too Soon to Call the Bottom

Cryptocurrency markets have consolidated a little after taking some deep losses during the early morning hours of Dec. 25. Global trade volume for the entire ecosystem of digital assets had dropped a few billion since last week’s price spikes, and bulls are starting to show signs of exhaustion. This Wednesday, the combined valuation of all 2,000+ cryptocurrencies in terms of 24-hour trade volume is roughly $17.4 billion. Bitcoin core (BTC) is trading for $3,792 at the time of publication and its markets are capturing $5.4 billion worth of today’s crypto trades. BTC is down 0.14% over the last 24 hours and down 1% for the week. The second largest market capitalization is commanded by ripple (XRP) which is trading for $0.36 per coin. Ripple markets are down 1.7% over the last day and are down 1.5% for the week.

Markets Update: Crypto Prices Begin to Slump as the New Year Approaches
Top 10 cryptocurrencies on Dec. 26, 2018.

Ethereum (ETH) has had a much better run over the last few days, with ETH markets up 0.55% today and 21% during the course of the last seven days. ETH is trading for $127 per coin and has a total market capitalization of around $13.2 billion. Lastly, the fifth biggest market valuation is still held by eos (EOS), where each token is swapping for $2.52. EOS has a $2.2 billion market cap and is up 1.8% today but down 3.9% for the week.

Bitcoin Cash Market Action

Bitcoin cash (BCH) markets are still doing very well this week after last week’s phenomenal 140% gains. BCH is still up by 32% over the last seven days and markets are up 3.2% in the last 24 hours. At the moment, BCH is trading for $168 per coin and the market has an overall valuation of about $2.9 billion. Trade volume is about $100 million lighter than a few days ago as today’s global BCH trade volume is around $551 million.

Markets Update: Crypto Prices Begin to Slump as the New Year Approaches
Bitcoin Cash (BCH) daily chart on Wednesday.

The top five exchanges swapping the most bitcoin cash are Lbank, Binance, Huobi, Coinbase, and Hitbtc. Lbank and Binance are capturing about ⅓ of today’s BCH trades. The top currency today paired against BCH is tether (USDT), with 47.3% of trades. This is followed by BTC (20.9%), ETH (16%), USD (7.4%), JPY (3.9%), and the KRW (1.9%). Bitcoin cash is the sixth most traded cryptocurrency on Wednesday above litecoin but below the volume of ripple.

BCH/USD Technical Indicators

Even though there was a sizeable dip the other day, a few indicators on the charts still look bullish. Looking at the four-hour BCH/USD chart on Bitstamp shows the two Simple Moving Averages will be crossing hairs very soon as the 100 SMA may rise above the longer term 200 SMA. For now, the path toward the least resistance is still the downside, but in the near term it looks like a trend change may appear.

Markets Update: Crypto Prices Begin to Slump as the New Year Approaches
Bitstamp BCH/USD 4-hour on Dec. 26, 2018.

Right now the Relative Strength Index (RSI 4-H -44.96) is meandering in the middle, indicating more uncertainty. The Holidays may be inflicting a slight lull as the stochastic reports the same findings over a broad set of trading ranges. Looking at the order books shows bulls need to muster up more strength to penetrate the $200 region again and gain headway. On the backside, bears will see pit stops all the way until the $150 range and a few more speed bumps if it falls below that price zone.

Markets Update: Crypto Prices Begin to Slump as the New Year Approaches
Bitstamp BCH/USD 4-hour window.

The Verdict: Uncertainty Remains Strong

This week has seen traders perusing ideas on Tradingview, some discussions between swing traders on Twitter, and Telegram trading channels showing people think the “bottom” has not yet been reached. The dip in trade volume was to be expected over the holidays between Christmas and New Year and analyzing crypto market trade volume may not be a great source of confirmation this week.

Markets Update: Crypto Prices Begin to Slump as the New Year Approaches
Cryptocurrency & Fiat money flow over the last 24-hours on Dec. 26, 2018.

BTC/USD and ETH/USD shorts are still well above normal, but discernibly less than two weeks ago. If digital asset markets cannot hold above the 50-day exponential moving average (EMA) then traders may see even lower bottoms in the near future. Overall, uncertainty remains high for traders who won’t attempt to call the bottom. Their stance is prudent one given that price letdowns have been one of the few certainties throughout the entire year.

Where do you see the price of BCH, BTC and other coins heading from here? Let us know in the comments below.

Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”


Images via Shutterstock, Trading View, Coinlib.io, Bitstamp, and Satoshi Pulse.


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The post Markets Update: Crypto Prices Begin to Slump as the New Year Approaches appeared first on Bitcoin News.

Cryptocurrency and Taxes: How to Use 2018’s Losses to Your Advantage

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Taxes have been a hot topic in the cryptocurrency world this year. Many countries have been trying to figure out how to tax crypto assets, while traders have been figuring out how to lever them to write off losses. As bitcoin and other cryptocurrencies enter the mainstream, tax reduction strategies are starting to emerge.

Also read: UK Investors to Pay Capital Gains and Income Tax on Bitcoin Investments

Governments Belatedly Address Bitcoin Taxation

As cryptocurrencies have entered the collective conscious and adoption has grown, governments have been trying to figure out how to tax them. Most recently, the U.K. government released a sprawling crypto tax advice document. Her Majesty’s Revenue and Customs (HMRC) reveals in the document that individual investors will be liable to pay capital gains tax each time they sell crypto assets such as BTC for profit. HMRC ruled that investors would not be allowed to classify their investment in cryptocurrency as “gambling”, which is tax-free when it comes to winnings.  Cryptocurrency and Taxes: How to Use 2018's Losses to Your Advantage

At the beginning of the year, U.K. Prime Minister Theresa May said her government would be looking at bitcoin and cryptocurrencies “very seriously” because of their potential to be “used by criminals.”

Elsewhere in Europe, the European Union has been advised to devise common cryptocurrency rules – and that includes tax. While Switzerland has decided to do away with regulation, the Swiss Federal Council has stated that it wants “the best possible framework conditions so that Switzerland can establish itself and evolve as a leading, innovative and sustainable location for fintech and blockchain companies.” In Russia, while the government is working out a regulatory framework, citizens are obliged to pay 13 percent tax on their crypto-related incomes.

This year in Asia, Korea said it is planning to tax cryptocurrencies and initial coin offerings (ICOs), while proposals to lower taxes on crypto in Japan were announced this month; currently the government can take as much as 55 percent from cryptocurrency transactions as miscellaneous income. Cryptocurrency and Taxes: How to Use 2018's Losses to Your Advantage

Taxation guidelines in the U.S. have generally been unclear. On Dec. 21, lawmakers filed a bill to create tax exemptions for certain cryptocurrency transactions. The state of Ohio also said it would accept BTC from its citizens to pay taxes.

Meanwhile, South Africa’s government, generally considered to be crypto-friendly, this year said income accrued from crypto transactions must be declared – and said it would be cracking down on tax-dodging cryptocurrency traders.

How Cryptocurrencies Can Help You Save on Taxes

While governments are figuring out how to tax cryptocurrencies, there are actually ways in U.S. citizens can use them to their advantage to pay less taxes.  This is due to a 2014 notice by the Internal Revenue Service (IRS) which treats cryptocurrencies as an investment property, rather than a currency. Whenever you trade cryptocurrency, the transaction is either a capital gain (where you make money) or a capital loss (where you lose money). And any losses this year could ultimately place you in a lower tax bracket.

The IRS allows taxpayers to deduct $3,000 in capital losses for any given year from money earned from a day job. Losses beyond that cannot be deducted until several years later.

As an example, let’s look at someone who bought $5,000 worth of BTC this year. After turning that into $10,000 through trading, they later lost cash due to a dip in the markets and took a big hit, losing $8,000. They cashed out, walking away with just $2,000. They would then be able to harvest a loss of $3,000 for the year which would be deducted from their taxable income. If that person made $50,000 in regular income, only $47,000 of it would be taxable.

In order to write off cryptocurrency losses as tax deductible in the U.S., it’s essential to properly file, with exact dates, all transactions incuding gains and losses. Certain online tools, such as bitcoin.tax, can be useful in calculating capital gains and losses. While 2018 has been a bad year for cryptocurrency investors, the ability to write off thousands of dollars of bad trades should provide some consolation.

Disclaimer: This editorial is intended for informational purposes only. Bitcoin.com and the author are not experts on taxes and cannot be held responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by following the information in this article. 

How have you managed with taxation on your crypto assets this year? Let us know in the comments section below.


Images courtesy of Shutterstock.


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The post Cryptocurrency and Taxes: How to Use 2018’s Losses to Your Advantage appeared first on Bitcoin News.