Bitcoin trading prices rose by more than 2.5% on Friday, close to $8,500, up 8.5% from Tuesday's low, this is the initial tax time limit for this year.
Many cryptocurrency analysts attributed most of the decline in Bitcoin in the past two months to investors’ cashing in last year’s large-scale capital gains tax.
Tom Lee of Fundstrat Global Advisors stated: "We think that bitcoin's 'winter' is over, because raising interest rates comes from the cessation of taxation days and the overall risk seems to be declining."
Bitcoin jumped in early trading Friday, driving its gains after tax rose more than 8%.
According to CoinDesk's Bitcoin Price Index, the cryptocurrency soared to $300 to $8,554.97. As of 4:10 pm, bitcoin trading prices rose more than 2.7% near 8,500 US dollars. ET.
This marks a 8.5 percent increase in the low of 7,834 dollars touched on Tuesday, which is the deadline for this year. The US Internal Revenue Service allows taxpayers to submit returns on the agency’s website one day in order to make payments on Tuesday.
Many cryptocurrency analysts attributed most of the decline in Bitcoin in the past two months to investors’ cashing in last year’s large-scale capital gains tax. Tom Lee of Fundstrat Global Advisors estimates that US households owe $25 billion in their encrypted electronic currency tax. He predicts Bitcoin will resume after the tax date and has a mid-year price target of $20,000.
“The US Tax Day was behind us (April 17). Since then, the overall sentiment of the cryptocurrency market has improved,” Li said in a note to customers on Friday. "We think that 'winter' is already over for Bitcoin, because the pressure from the taxation days and headline risk appear to be diminishing."
He pointed out that the Coinshares Crypto ETF traded in Europe is a leading indicator of Bitcoin prices. Lee compared the ETF with the prairie Punxatawney Phil who predicts whether the winter is over. If Phil sees his shadow, then winter will continue. If not, then winter is over.
“We believe that large institutional investors around the world will use this ETF as a way to quickly reach Bitcoin,” said Lee. "So, when the stock price goes up, the big money is buying Bitcoin."
Technical analysis also shows that bitcoin may go higher, albeit in smaller quantities.
“Bitcoin is now testing a very important downtrend line, which is the same rate of Cryptocurrency failures in January and March (on a logarithmic level),” said Frank Cappelleri, executive director of stocks at Nomura Instinet, in a report.
He said that if Bitcoin can break the line, the chart shows that the price could easily rise to $9,173.
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