Bitcoin hits 3-month high

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Bitcoin hit a three-month high

Bitcoin surged to a three-month high on Monday as policymakers seek to resolve last-minute compromises on how to tax crypto assets.

The biggest digital coin rose 5% to $ 46,060 during New York trading hours. The rally builds on the recent momentum – the coin has risen by around 17% over the past week.

Peer coins also benefited, with Dash, Ether, and Litecoin, among others, each rising at least 3%. The Bloomberg Galaxy Crypto Index of Largest Digital Assets rose 6.7% at one point, also its highest since May.

This move should tell us the worst is behind us for now, said Matt Maley, chief market strategist for Miller Tabak + Co. Unless he immediately reverses the move, it could quickly rise to 50,000. $, where it might find some resistance. Still, the action is very bullish on a technical basis, he said.

The rally comes as policymakers in Congress battle over how to frame a section of the infrastructure bill that would impose new tax rules for cryptocurrencies. Under discussion, language which could refine the definition of crypto brokers required to report transactions and which could exempt certain entities from reporting rules.

Meanwhile, traders are watching Bitcoin’s charts for clues on the next step. The coin’s 14-day Relative Strength Index (RSI) shows it is overbought, although it broke its 200-day moving average line in the middle of the rally. The coin could still find resistance there – as it did in May – although a sustained position above this is seen as a bullish development. Many envision $ 50,000 as the next key threshold.

Bitcoin regained its momentum last week, wrote Craig Erlam, senior market analyst at OANDA Europe. Now back in bullish territory, the question is how far it can go this time around.

After correcting more than 50% and forming a solid foundation of support in a potentially longer-term bull market, the odds are in favor of Bitcoin – and Ether – to resume its upward trajectory, wrote Mike McGlone of Bloomberg Intelligence. in a note. The years after the halving have historically seen great appreciation, he said, and the original cryptocurrency could reach $ 100,000.

One question is whether supply and demand conditions have deteriorated since early 2021 and compared to Bitcoin’s past, McGlone wrote. Our view is that the fundamentals are bullish in a maturing environment.

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