It’s another interesting week for the world’s most popular cryptocurrency as the price recovers from a longer downtrend that shook the markets. After the U.S. Senate hearing brought new faith in the future of cryptocurrencies last week, Bitcoin began a gradual climb from its $7,000 levels to reaching $9,000. And judging from our technical analysis, the bullish momentum looks like it’s here to stay.
Other interesting news we saw throughout the week came from the Nordic country of Iceland where new reports suggests that Bitcoin mining is on such a rise that by next year the island nation will be using more electricity to power mining rigs than households. As Business Insider reports, the conclusion was reached by Icelandic energy provider HS Orka who also reportedly told the media that it won’t have sufficient energy to power the country should new data centers open up.
According to the reports, Bitcoin mining in Iceland consumes approximately 840 GWh (gigawatt hours) to power mining rigs. On the other hand, households use only 700 GWh. The reason for the country being so involved in mining is its suitable conditions allowed by fast fiber-optic internet, cheap electricity, and naturally cold climate that allows miners to keep the heat of their mining systems down.
Market Stays Bullish
In the past week since our last update, Bitcoin’s price movement drew a wavy line on the price charts as the value moved up and down to establish a stronger support level. The lowest price point was hit on early Thursday hours, when the price reached $7,714.99, while the highest price point came on Saturday morning, when 1 BTC reached a price of $9,106.49.
Throughout last week, the trading volume remained fairly consistent after the first price push on Wednesday and mostly moved between the $6-7 billion mark. As of now, the volume is at $6.14 billion and slowly increasing while the market cap is at $150 billion.
Our technical analysis shows that the market sentiment is predominantly bullish as 8 out of 12 oscillators and 8 out of 12 moving averages are indicating a buying trend. The long-term SMA 100 has also climbed above the SMA 200, showing that there is less resistance to the upward course. From this stance, we are looking at further growth unless new major sell-offs are triggered by negative market updates.
U.S. Tax Payers Avoid Reporting Bitcoin Profits
In other news, U.S. taxpayers fail to report profits they made by investing in Bitcoin. According to Fortune magazine, and based on data from Credit Karma, only 0.04% of tax filers have reported their cryptocurrency losses and gains to the IRS this year. Considering the estimate that around 7% of U.S. citizens hold Bitcoin or other cryptocurrencies, this indeed is a very small number.
According to other numbers from the personal finance service, less than 100 people out of the 250,000 that were the first to file their tax return forms reported any event related to cryptocurrencies. Out of this small group of people, only 1 person had disclosed a “significant” loss or gain. Thus far, the IRS received only 13% of the expected tax forms (18.3 million) but there has been no significant uptick in people reporting cryptocurrency earnings.
Another interesting statistic from a January survey by Credit Karma showed that around 57% of 2,000 cryptocurrency holders said to have made gains on their investments in crypto-assets. For contrast, an even bigger percentage of 59% said that they have never filed any gains to the IRS, which they are obliged to do by law.