Next Monday marks the U.S. filing deadline for the 2020 tax year. Without a doubt, there are many American traders that have to claim massive gains from the 2020/2021 crypto runup. Holders of Polkadot (DOT) and Tron (TRX) are no different, as the altcoins have posted epic 12-month gains.
Regulation may be the single largest driver of cryptocurrency values. And, taxation is certainly a big part of most governmental stances toward crypto investing. In the U.S., the situation is changing rapidly. Last week brought regulatory disclosure of Kraken’s customer transactions of more than $20,000 in coins (2016-20). Further, the public status of Coinbase is going to bring a new level of scrutiny and transparency to the issue of taxation.
Also, it’s important to remember that the Biden administration has proposed increasing the Internal Revenue Service’s budget by $80 billion dollars. So, the IRS is highly likely to aggressively expand its reach into the cryptosphere. Add these factors up ― U.S. tax reform is coming to the cryptocurrency trade.
Of course, these issues have yet to negatively impact retail crypto traders. However, when they do, it is likely to have a profound impact on the likes of Polkadot and Tron.
The Uptrend Is Valid For Polkadot (DOT)
As you can see from the weekly chart below, Polkadot remains in bullish territory. As long as price stays above $35.80, a long-side bias is warranted.
Here are the key levels to watch in DOT this week:
- Resistance(1): Triple-Top, $46.70-$48.33
- Support(1): Weekly SMA, $35.80
Tron (TRX) Holds Firm In Bullish Position
If you toggle to the weekly setting on the dynamic TRX/USD chart below, you’ll see a few items worthy of note. First, notice the two spikes above $0.17. This has been a key historic resistance area and one to watch for Tron in the coming week.
The following are two levels on my radar in this market:
- Resistance(1): Double-Top, $0.17-$0.18
- Support(1): Psychological Barrier, $0.10
With the tax deadline about seven days out, it ought to be an interesting week for cryptocurrencies. If we see any high-profile crackdowns from the IRS and Biden administration, crypto values will likely suffer. However, for now, a bullish bias toward Polkadot and Tron continues to be appropriate.