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Investing.com – It has now been over a year since El Salvador recognized the as legal tender. The Central African Republic has also decided to do the same, while other countries are weighing the pros and cons.
In Australia, this has led the Department of Finance to question the tax classification of bitcoin. As bitcoin is partly legal tender, there has been some discussion as to whether it should be taxed as a foreign currency. This would mean that the tax rate would only be 23.5 percent.
In the federal budget released on October 25, however, it was clarified that bitcoin would continue to be subject to capital gains tax. In the worst case, this means a 45% levy on the maximum rate of income tax. This rate, however, is halved if the BTC has been held for more than a year. The federal budget states as follows:
“This provision ends the uncertainty that followed the Salvadoran government’s decision to allow bitcoin as legal tender. It will apply retroactively to income years including July 1, 2021.”
Bitcoin: technical benchmarks
Bitcoin is currently up 0.31% at a price of $20,729, while it is gaining 8.32% on a weekly basis.
Bitcoin’s recovery from the 23.6 percent Fibo retracement stopped at the 61.8 percent Fibo retracement of $20.978. Yesterday’s closing price was further below the 100-day MA of $20.879, so further strong momentum would be needed to break through the resistance zone. If successful, a daily close above this zone would accelerate the bullish move towards the 78.6% Fibo retracement of $21,736.
Immediate support is found with the 50 percent Fibo retracement at $20.446. If it is crossed downwards at the daily close, attention will be focused on the psychological threshold of 20,000 dollars. Support is bolstered by proximity to the 38.2 percent Fibo retracement, which sits at $19,914.
By Marco Oehrl