FX.co ★ Technical Analysis of ETH/USD for October 14, 2022

Crypto Industry News:

The Portuguese authorities recently announced plans to introduce a 28% tax on cryptocurrencies from the beginning of 2023. The published (in Portuguese) report revealed that the group of government representatives led by the minister of finance really strongly wants 2022 to be the last year in which cryptocurrencies are tax free. Everything points to the end of the Portuguese tax haven for crypto enthusiasts.

Pursuant to the provisions of the proposed act, 28% of the tax is to be applied to all digital assets that have been purchased and stored for a period of less than one year. What's more, lawmakers are also pushing to tax all "free cryptocurrency transactions", i.e. primarily crypto received under airdrops - here the tax would be 10%. Conversely, all assets held for more than one year will still retain their status and will not be subject to the new tax.

The drafters' plan also provides for 4% taxation of fees charged by brokers. According to the application, any profits resulting from the sale or mining of cryptocurrencies will be considered income and will be subject to the new tax. When tracing the history of such government movements, expect an exodus of cryptocurrency companies outside Portugal - especially mining companies.

Already, many people are also wondering whether government interference in the current state of affairs will not be counterproductive and will cause cryptocurrency holders and companies from the industry to flee abroad. Then, not only will they not pay a penny of tax, but they will also stop spending their cryptocurrencies and support the Portuguese economy.

It is worth noting that this is not the first time that some Portuguese parliamentarians want to tax digital assets. The last such attempt took place in May 2022 - the idea, however, failed the vote of confidence and was rejected. But observers say this time is different - Portugal is said to be desperate to save falling GDP and a shrinking economy, and terrified by the specter of recession, it may resort to new taxes.

Technical Market Outlook:

The ETH/USD pair had made a new swing low at the level of $1,191 and ten reversed aggressively back above the demand zone and the middle of the old trading range. The local high was made at the level of $1,341 (at the time of writing the article), but with the strong and positive momentum on the H4 time frame chart, the outlook remains bullish and a target for bulls is seen at $1,358 and $1,372. The demand zone is now located between the levels of $1,191 - $1,1219.

Weekly Pivot Points:

WR3 - $1,369

WR2 - $1,346

WR1 - $1,333

Weekly Pivot - $1,322

WS1 - $1,309

WS2 - $1,299

WS3 - $1,275

Trading Outlook:

The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls is seen at $1,281 as a part of the demand zone located between the levels of $1,252 - $1,295. If the down move will be extended, then the next target for bears is located at the level of $1,000.