FX.co ★ Bitcoin analysis for 24/05/2018

The financial media reports, that India is working on legislation to ensure that cryptocurrency transactions are subject to value-added tax (GST).

According to anonymous sources, the Central Council of Indirect Taxes is considering applying a 18 percent tax on foreign exchange operations, which it would perceive as "intangible assets".

"The purchase or sale of cryptocurrencies should be treated as a supply of goods, and those that facilitate transactions, such as delivery, transfer, storage, accounting, etc., will be treated as services" - we read in the publication.

Until now, India has refrained from issuing rules on cryptocurrencies, despite the central bank's efforts to hinder businesses and citizens from interacting with them. In April, the Reserve Bank of India formally prohibited the operation of cryptocurrency enterprises to domestic institutions, which has not stopped the creation of new exchanges so far. If the taxation system comes into effect, it would mean a move towards the legality of the industry with a constant lack of iron regulations. If the buyers and sellers are in India, the transaction will be treated as a software delivery and the location of the buyer will be the place of delivery. [...] Transactions outside India will be subject to an integrated GST and will be treated as import or export of goods. IGST will be imposed on cross-border deliveries.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The Double ZigZag corrective structure has hit the projected target at the level of $7,441 and established a bottom for the corrective wave 2/B. In order to continue the bounce, the price should now move up towards the level of $7,712 and then $7,890. The golden trend line dynamic resistance is still the key line for bulls as any breakout through it will likely trigger a rally higher.