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28 March 2024
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Bitcoin down ahead of the European Parliament’s potential decision to ban PoW coins

  • Bitcoin dropped in price as the European Parliament debates a potential ban on the cryptocurrency.
  • If Bitcoin is banned, it could have a significant negative impact on the market

Bitcoin and other cryptocurrencies moved into a corrective position throughout the weekend as the European Parliament committee prepares to vote on a new regulatory framework later today. The framework, which is known as Markets in Crypto Assets (MiCA), could put the Proof of Work (PoW) coins under scrutiny.

Members of the European Parliament’s economic and monetary affairs committee are set to vote on whether to bring cryptocurrencies under the scope of existing financial regulation. The vote is part of a wider effort to crack down on money laundering.

Industry executives are expecting the EU’s parliament to approve a bill that would effectively ban major digital currencies like Bitcoin and Ethereum for environmental sustainability purposes.

Bitcoin and other crypto price

The world’s most valuable digital currency stayed in a tight trading range over the weekend, with highs around $40,000 and lows just above $37,000 pressured by risk aversion in global markets owing to the conflict in Ukraine.

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Meanwhile, the value of ‘altcoin‘ Ethereum stays steady at $2500, with alternative cryptocurrencies taking a minor hit. According to CoinMarketCap figures, the total market valuation has dropped by 1.3 percent to $1.72 trillion.

If approved, the measure would give European Union countries the power to ban bitcoin and other digital currencies running on the proof-of-work consensus mechanism. It would also require companies that deal in cryptocurrencies to carry out Know Your Customer (KYC) checks on their customers.

EU concerns on PoW

The European Parliament vote is not expected to result in an immediate ban on bitcoin, but it could add to the pressure on authorities to take action against the cryptocurrency.

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Bloomberg released a sneak peek of the final version of this bill that will be voted on Monday in a parliamentary panel, and as expected, cryptoassets or traded in the EU “shall be subject to achieve compliance with these minimal environmental sustainability requirements, the company shall develop and implement a staged implementation strategy.”

Whatever the case, concerns about stringent regulation in Europe are deterring investors from investing in the market. The MiCA regulatory framework, which will go through several phases before 2024, when it is anticipated to be ready for approval, and the fact that it appears to be more restrictive, are causing a negative impact on digital assets in Europe.

In the United States, the Securities and Exchange Commission has begun cracking down on initial coin offerings (ICOs), while China has taken a more heavy-handed approach, banning crypto and shutting down exchanges.

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The European Parliament vote comes as policymakers around the world are grappling with how to deal with cryptocurrencies. While some see them as a threat to financial stability, others see their potential for innovation.

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Bitcoin price retested the $35,000 support level against the US Dollar. BTC is now rising, but it must clear $37,000 and the 100 hourly SMA for a steady increase. Bitcoin is recovering higher from the $35,000 support zone. The price is currently well below $37,000 and the 100 hourly simple moving average. There was a break above a key bearish trend line with resistance near $36,000 on the hourly chart of the BTC/USD pair (data feed from Kraken). The pair must clear $37,000 and the 100 hourly SMA to start a fresh increase in the near term. Bitcoin Price is Facing Key Resistance Bitcoin failed to stay above the $37,000 support zone and extended its decline. BTC even broke the $36,000 support level and settled below the 100 hourly simple moving average. There was a spike below the $35,000 support level. A low was formed near $34,830 and the price is now correcting higher. There was a break above the $36,000 resistance level. The price climbed above the 50% Fib retracement level of the recent decline from the $37,915 high to $34,830 low. There was also a break above a key bearish trend line with resistance near $36,000 on the hourly chart of the BTC/USD pair. The pair is still well below $37,000 and the 100 hourly simple moving average. Bitcoin Price Source: BTCUSD on TradingView.com The 76.4% Fib retracement level of the recent decline from the $37,915 high to $34,830 low is also near $37,200 to act as a major hurdle for the bulls. If there is a clear upside break above $37,000 and $37,200, the price could start a major increase. The first major resistance is near the $38,500 level. The main resistance is still near the $40,000 zone. A clear break above the $40,000 level could set the pace for a larger increase. Fresh Decline in BTC? If bitcoin fails to clear the $37,000 resistance, it could start a fresh decline. An initial support on the downside is near the $36,000 level. The first major support is near the $35,500 level. If there is a downside break below the $35,500 support and $35,000, the price could start a sharp decline towards $32,000. Technical indicators: Hourly MACD – The MACD is now gaining pace in the bullish zone. Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level. Major Support Levels – $36,000, followed by $35,500. Major Resistance Levels – $37,000, $38,500 and $40,000.

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