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At the time of writing, BTC is trading at $56,892.66, with a 1.02% increase in the last 24 hours. and with a market cap of $1.12. The 24-hour trading volume stands at $30.9 billion but as a 4.19% drop.
Japanese cryptocurrency holders will deepen the worry no further as in a remarkable change, the Financial Services Agency (FSA) has made plans to fully revise the tax code of the country in the Fiscal year 2025. The change could lower the BTC and all crypto-asset tax rates to near the rates of conventional instrument taxation.
Currently, crypto profits in Japan are taxed as miscellaneous income at rates ranging from 15% to 55% depending on the individual's income bracket. This stands in stark contrast to stock trading profits, which are taxed at a maximum rate of 20%. The proposed changes aim to treat cryptos more like conventional investment assets, potentially reducing the maximum tax rate from 55% to 20%.
The Japan Blockchain Association, a pro-crypto lobbying group, has been advocating for such reforms for years. Their recent proposal includes a flat 20% tax rate for crypto and a three-year loss carryover deduction. While previous efforts have not yet resulted in policy changes, the FSA's latest proposal signals a potential shift in the government's stance.
Technically speaking, Bitcoin has been on a downtrend from the last high of around $65,000 recorded on August 25. It has been consolidating at a support level formed by a mini-bullish flag pattern for several days. This consolidation occurred as a retest of a broken-out mini-bullish flag inside the main bullish flag at $57K.
Recently, BTC broke below this support and dropped to the $56K level, recording a low of $55,555. Despite this downward movement, Bitcoin has managed to hold above the $56,000 support and the mini-bullish support level. However, the current bearish pressure suggests that it may drop further to $52K, where it might find support at the base of the major bullish flag. The daily RSI currently sits at 41 indicating selling pressure in the market. This technical indicator suggests that bearish sentiment is dominating in the short term.
Looking ahead, historical trends provide some interesting insights. With the U.S. presidential election just exactly 2 months from today, set on November 5, 2024, Bitcoin has shown a pattern of consolidation leading up to such events, followed by massive price movements afterward.
Additionally, a tweet from REKT Capital points out that Bitcoin tends to break out 150-160 days after the halving event. This projection suggests a potential breakout from its re-accumulation range in late September 2024. It states that it's worth noting that September has historically been a challenging month for Bitcoin, with average monthly returns of -4.48%. In contrast, October has been a strong month, boasting average monthly returns of 22.9%.
Given these factors, it wouldn't be surprising to see Bitcoin continue its consolidation phase slightly beyond late September, for a potential October breakout. However, much will be unveiled based on this month's Federal Reserve events.
