Bitcoin Fell Below $50,000 for the First Time in a Long Time

Bitcoin declined below the $50,000 psychological support line and the world’s largest cryptocurrency fell to the lowest level in 48 days. At around 17:00 UTC on April 22, the price of bitcoin fell from around $54,900 to $51,500 before the markets inflicted another sell-of to $48,300. Currently, prices are hovering around $49,200, representing an 8% drop or loss of about $4,300 over the previous 24-hours.

Last several days represent one of the worst periods for bitcoin since it declined in February. Moreover, even cryptocurrencies that managed to eke out gains over the past few days fell on Friday. Cryptocurrencies such as XRP and ether also suffered losses.

A proposed capital gains tax increase for rich Americans intensified the volatility. On Thursday, Bloomberg released some interesting information. According to Bloomberg, Biden plans to almost double the capital gains tax.

President Biden is ready to raise the marginal income tax rate to 39.6% from 37%. He is also willing to increase taxes on capital gains to 39.6% for people who earn more than $1 million.

The Biden administration wants to raise taxes on the richest Americans, to fund about $1 trillion in childcare and other expenses. The new administration is willing to modernize the U.S. tax system.

President Joe Biden promised not to raise taxes on households earning less than $400,000. Sources said details would be released next week before Joe Biden’s address to Congress on Wednesday. According to White House press secretary Jen Psaki, the president would discuss his “American Families Plan” during his speech to Congress, but she declined to comment on any details.

Bitcoin and its dominance ratio

Earlier on Thursday, bitcoin dominance or the ratio of bitcoin’s value to the overall market capitalization of digital assets, declined below 50%. It is the worst result since 2018. The ratio was 48% as of 15:44 coordinated universal time as of April 22.

Bitcoin’s market cap is more than $1 trillion as of Thursday, versus about $2.13 trillion for CoinGecko’s universe of 6,816 digital coins. Interestingly, ether’s share of market capitalization is about 14%.

Even though bitcoin is up 88% this year as of April 22, the rally stalled recently. The price has since faded to about $55,000. Instead, traders increased the prices of other cryptocurrencies from Aave’s AAVE tokens to Zcash’s ZEC.