Crypto Industry News:
Another black cloud over the cryptocurrency industry in the United States. Recently, BTC miners managed to avoid a high tax on electricity used to mine cryptocurrencies, but the legislator has again targeted cryptocurrencies.
Instead of Proof-of-Work, the US Treasury has now focused on Proof-of-Stake and intends to tax staking. In the background looms the need to patch the budget hole, which is why the amount of taxes and levies may be even greater.
The Internal Revenue Service (IRS) published a communication on July 31 about the new taxation related to the cryptocurrency industry. The prize for being a network validator in the form of staking is to be subject to tax from now on. According to the IRS, the profit from staking will be treated as gross income for the year.
The new obligation will apply to both direct participation in securing the Proof-of-Stake network and the case of staking cryptocurrencies via a cryptocurrency exchange. In the new ruling, there is a provision that a fair value of profit from cryptocurrencies (staking) must be entered in the annual statement of income for a given period.
The change in regulations is a shock to the cryptocurrency industry, because so far IRS regulations have not mentioned staking. According to Ryan Selkis, the founder of Messari, the US Treasury sees cryptocurrency staking as a form of dividend paid on shares.
Interestingly, the new IRS regulation appeared less than four months after the introduction of a key update of the Ethereum network, which has been operating on the Proof-of-Stake algorithm for almost a year. The Shapell Hard fork update allowed validators to withdraw staked ETH, which until then had been locked in the Beacon Chain pool. The government decided to profit from the constantly developing second cryptocurrency on the market.
Technical Market Outlook:
The ETH/USD pair has bounced from the level of $1,827 which is the key short-term technical support level. Any violation of this level would open the road towards the next target located at $1,777. The intraday technical resistance is seen at the level of $1,888 and the bounce high was made at the level of $1,800. The strong and positive momentum on the H4 time frame indicates a possibility of a stronger bounce towards the level of $1,891.
Weekly Pivot Points:
WR3 - $1,906
WR2 - $1,885
WR1 - $1,874
Weekly Pivot - $1,863
WS1 - $1,853
WS2 - $1,842
WS3 - $1,821
Trading Outlook:
The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August 2022 at the level of $2,029. This is the key level for bulls, so it needs to be broken in order to continue the up trend. The key technical support is seen at $1,368, so as long as the market trades above this level, the outlook remains bullish.
