22.12.202514:01 Forex Analysis & Reviews: US Congress prepares tax haven for cryptocurrency

While Bitcoin and Ethereum are showing signs of life as they continue their recovery, which began at the end of last week, the US Congress is preparing a bill that will create a tax haven for cryptocurrencies.

Key ideas in the bill include provisions for stablecoins: transactions involving regulated stablecoins are expected to be exempt from capital gains tax. For staking and mining, it is planned to allow a five-year deferral of tax on rewards, after which income would be taxed at market value. Additionally, there is an expectation for the development of uniform tax rules for cryptocurrencies, similar to those applied to stocks and commodities, without classifying them as securities.

Perhaps most interesting is the proposed legislation aimed at combating wash trading in digital assets, which many pseudo-companies engaging in the issuance and listing of "shitcoins" on cryptocurrency exchanges are currently guilty of.

This initiative from Congress could serve as a powerful incentive for further development of the crypto industry in the US. Creating a tax haven for stablecoins and exempting transactions from capital gains tax would undoubtedly attract investors and increase trading volumes. The deferral of tax on rewards from staking and mining would also be an appealing factor for those engaged in cryptocurrency extraction and storage.

The unification of tax rules applied to cryptocurrencies will simplify the taxation process and make it more understandable for all market participants. It is important to note that not recognizing cryptocurrencies as securities will relieve them of additional regulatory burdens, which will also positively impact the industry's growth.

The fight against wash trading is aimed at enhancing transparency and integrity in the digital asset market. Legislative actions to curb such manipulations will protect investors from fraudulent schemes and strengthen trust in cryptocurrencies overall. This is particularly important in light of the so-called "shitcoins," which are often used in such manipulations.

Overall, the proposed bill represents a step in the right direction. It aims to create a favorable environment for the development of the cryptocurrency industry in the US, attract investments, stimulate innovation, and protect investors.

Trading recommendations

Regarding the technical picture for Bitcoin, buyers are currently targeting a return to the $89,600 level, which opens a direct path to $92,300, and from there it's just a step away to $95,000. The furthest target will be the peak around $95,900, with a breakout at this level indicating attempts to return to a bull market. If Bitcoin falls, I expect buyers at the $87,400 level. A move below this area could quickly drag BTC down to around $85,500, with the furthest target being the $83,220 region.

As for the technical picture of Ethereum, a clear consolidation above the $3,105 level opens a direct road to $3,233. The ultimate target will be the peak around $3,349, with a breakthrough indicating strengthening bullish sentiment in the market and renewed interest from buyers. If Ethereum falls, I expect buyers at the $2,997 level. A retreat below this area could swiftly push ETH down to around $2,858, with the furthest target being the $2,763 region.

What's on the chart

• Red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.