Bitcoin prices fell below $7,000 on Monday ahead of the looming April 17th U.S. tax-filing deadline. Analysts speculate that U.S. households likely owe billions of dollars in capital gains taxes for their cryptocurrency holdings and that investors are selling in order to meet their tax liabilities.
Bitcoin prices have fallen more than 27% over the past month and are down over 52% for 2018. The recent slide comes after the price of Bitcoin rallied a massive 1,400% in 2017.
Regulatory uncertainty has played a role in Bitcoin’s decline. Bitcoin fell below the key psychological level of $10,000 in March after the U.S. Securities and Exchange Commission (SEC) announced that online platforms trading digital assets that are considered securities need to register with the agency.
The SEC is also cracking down on initial coin offerings (ICO’s). Last week, the SEC charged two founders of a cryptocurrency firm called Centra with carrying out a fraudulent ICO. Centra raised $32 million and was promoted by boxer Floyd Mayweather.
The Reserve Bank of India announced last week that regulated financial institutions in India are banned from dealing with cryptocurrencies. However, India’s central bank noted the potential of blockchain technology, stating that it might benefit the financial system.
The much talked about ‘Death Cross’ (50 period moving average crossing below the 200 period moving average) has yet to form on the daily chart but is looking increasingly likely. The outlook remains bearish on the daily time frame as price holds below the 200 period moving average.
Price is currently hovering near the recent low of $6363. The next obvious level of support underneath is the prior low of $5848.