Forex Analysis & Reviews: 15.03.2022 - The proposal to ban bitcoin...

15.03.2022 02:32 PM

The proposal to ban bitcoin in the EU due to Proof-of-Stake is rejected

A new rule that could ban the popular bitcoin cryptocurrency in the European Union was rejected yesterday. On Monday, the European Parliament's Committee on Economic and Monetary Affairs voted by 30 votes to 23 to exclude this provision from the Markets in Crypto Assets (MiCA) project - a comprehensive EU regulation on digital asset management. Six members of the commission abstained from voting.

Let me remind you that the provision in question required that all crypto assets comply with the "minimum standards of EU environmental certification concerning their consensus mechanism used to verify transactions." For cryptocurrencies such as bitcoin and ether, whose turnover in the EU is quite high, the rule suggests a phase-out plan to transfer their consensus mechanism from Proof-of-work to other methods that consume less energy. Let me remind you that ether already has plans to switch to the Proof-of-Stake consensus mechanism, however, this option is unlikely to be acceptable for bitcoin since it changes its whole essence. The proposal was met with a rapid negative reaction from the crypto community around the world.

A compromise was also reached during the vote, which called on the European Commission, responsible for new legislation in the field of digital assets, to propose alternative regulation. By January 1, 2025, the Commission must submit to the European Parliament a legislative proposal to amend Regulation (EU) 2020/852 following environmental requirements. However, some EU leaders were dissatisfied with this result, as they are seriously concerned that in the near future renewable energy may be aimed at supporting the work of cryptocurrencies instead of its national use. This will create an even greater load on standard networks and operating stations.

The fact that bitcoin ignored yesterday's vote indicates that there is no panic among the leaders of the cryptocurrency community. However, if such a measure is adopted in the future, the collapse of the cryptocurrency will not happen. Mining of bitcoin and other altcoins, as well as support for the functioning of the network that miners are engaged in, is not so common in the EU. However, the parliament may go so far as to follow the path of China and impose a ban on the circulation of cryptocurrencies on the territory of the European Union - then this will become another test for decentralization and all the staples of the cryptocurrency world. But such drastic measures have not even been considered yet.

As for the technical picture of bitcoin

Bitcoin once again aimed at the $37,500 mark, but was rebuffed by buyers there. Active purchases in this range have been observed for quite a long time, and there is the highest interest in the first cryptocurrency. Now everything is tied to the levels of the greed of investors and their intimidation of what is happening on the world stage. In the event of another decline in the trading instrument, only a breakdown of $37,500 will fail the trading instrument below, to a minimum of $34,300, and there it is at hand to $32,900. It will be possible to talk about stopping the bear market in the current conditions only after BTC returns above $ 41,850. Only after that, you can expect to recover to the areas of $45,360 and $48,500. The fact that bitcoin feels pretty great in the current conditions proves the interest in it, keeping its bullish potential in the long run.

As for the technical picture of the ether

The focus remains on the resistance of $2,756. Only consolidation above will return the prospect of an upward correction to the market. In the meantime, the probability of a large bearish trend will be valid. The breakdown of $2,756 will serve as a new impulse to reach the levels of $2,942 and $3,190. If the pressure on ETH persists, purchases in the area of large support of $ 2,500, as it was this weekend, are not excluded. A break in this range will be a reason to go to the lows of $2,312 and $2,149, where the major players will again begin to actively act.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.