Bitcoin holds positions as US extends sanctions against Russia to cryptocurrency mining
By Noemi Jansana / Alejandra Zamora
Date: Thursday 21 Apr 2022
(Sharecast News) - For the first time in history, the US enacted economic sanctions against a cryptocurrency mining company. The US Treasury Department announced, via a statement, that it is taking action against companies in Russia's virtual currency mining industry, in a move that comes just after the International Monetary Fund (IMF) warned that the Kremlin could use these operations to evade international economic punishments imposed for its invasion of Ukraine. For now, reaction in the cryptocurrency market has been almost non-existent, with Bitcoin and 'altcoins' consolidating their recent moves.
For instance, Satoshi Nakamoto's coin is holding at $41,500 - $41,800, as it managed to reach a high since April 11th above $42,000 on Wednesday. However, selling pressure rejected the bulls' advance, which failed to confirm the overcoming of this important resistance level, crucial for the virtual token par excellence to regain $45,000.
Now, the shortest-term support is back to $40,000, where "traders know that for the 'bulls' to succeed, Bitcoin has to stay above this critical price level," warned Naeem Aslam, head of analysis at AvaTrade.
The expert called for caution, however, as on the fundamental side, the IMF's new warning about countries using cryptocurrencies to avoid sanctions is in the spotlight. Cryptocurrencies are being used to sell oil and gas to some extent by countries such as Iran and Russia. There is also concern that these countries are using oil and gas resources to fuel cryptocurrency mining, which is another source of revenue, and to circumvent all sanctions.
"The IMF's warning will certainly bring more regulatory attention to crypto companies, crypto exchanges and crypto mining," Aslam commented.
And so it has. The US Office of Foreign Assets Control (OFAC) designated Bitriver AG, a Swiss-based holding company for a cryptocurrency mining operation with three offices in Russia, as well as ten of its subsidiaries, for "operating or having operated in the technology sector of the Russian Federation economy." This landmark designation by the Treasury marks the first time a cryptocurrency mining operation has been sanctioned by the United States, but the company is also in the midst of a token pre-sale for the BitRiver token (BTR), scheduled to begin trading on the secondary market on Friday.
According to the sanctions imposed by the U.S. Treasury, BitRiver is "operating vast server farms that sell virtual currency mining capacity internationally; these companies help Russia monetize its natural resources." According to the Treasury press release, while Russia has the advantage of energy resources and a cold climate for cryptocurrency mining, "mining companies rely on imported computer equipment and fiat payments, making them vulnerable to sanctions. The U.S. is committed to ensuring that no asset, no matter how complex, becomes a mechanism for the Putin regime to offset the impact of sanctions."
ETHEREUM RALLY IN SIGHT IF IT OVERCOMES RESISTANCE
As for other cryptoasset market news, Ethereum also managed to pierce two major resistance levels at $3,080 and $3,150 and left 10-day highs on Wednesday. However, it has failed to distinctly clear the latter of these two resistances and is battling with the first of them. Technical analysis indicates that the second largest market cap token could stage a rally if it clears the $3,150 price level.
The price is now above $3,080 and the 100-hour simple moving average. There is a key uptrend line forming with support near $3,080 on the hourly chart of Ethereum/dollar, analysts at 'Newsbtc.com' pointed out.
The pair needs to break above $3,130 and $3,180 to initiate another near-term rally. Ethereum remained well bid and extended the rise above the $3,080 resistance. Ether even broke the $3,130 resistance zone and settled above the 100-hour simple moving average.
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