Bitcoin Price Surges On Positive News: FASB’s Fair Value Recognition Reignites $42,000 Support Recovery
13 Dezembro 2023 - 5:00PM
NEWSBTC
The Bitcoin price experienced a notable downturn as selling
pressure intensified, resulting in a decline of over 4% from its
annual peak of $44,500. This downturn was further exacerbated by
the loss of the crucial $42,000 support level. However, the
largest cryptocurrency in the market received a substantial uplift
from the US Financial Accounting Standards Board (FASB), which has
spurred a rapid 1.8% surge in BTC’s value within the past two
hours. As a result, Bitcoin has successfully recovered the $42,000
support level. FASB’s Fair Value Recognition Brings Clarity To BTC?
In a significant development for the cryptocurrency industry, the
FASB has announced new accounting rules that require companies,
including prominent entities like MicroStrategy, Tesla, and Block,
to measure their cryptocurrency holdings at fair value. These
rules, set to go into effect in 2025, allow businesses to capture
the real-time highs and lows of their Bitcoin and Ethereum (ETH)
assets, providing a more accurate representation of their holdings.
Related Reading: OKX DEX Loses Over $400,000 To Hackers – What
Happens To Customer Funds? Under the previous accounting practices,
companies were only allowed to record the lows, resulting in a
one-sided accounting treatment that often led to reduced valuations
and diminished earnings for businesses holding cryptocurrencies.
The highly volatile nature of crypto values further exacerbated the
issue. The FASB’s new rules address these concerns by mandating the
recording of cryptocurrencies at fair value, a measurement
technique aimed at reflecting the most up-to-date value of these
assets. Changes in fair value will now be recorded in net
income, allowing companies to account for fluctuations in the value
of their crypto holdings more comprehensively. The positive news
for BTC lies in the fact that the new FASB rules provide greater
transparency and accuracy in assessing the true value of
cryptocurrency assets. By capturing fluctuations in fair value,
companies will have a more realistic representation of their
holdings, enabling better decision-making and financial reporting.
Bitcoin, being the most widely recognized and valuable
cryptocurrency, stands to benefit significantly from these changes.
The recognition of its fair value allows companies to showcase the
true worth of their BTC holdings, potentially boosting investor
confidence and attracting further institutional interest. Turbulent
Times Ahead For Bitcoin Price Following these recent developments,
the Bitcoin price has successfully rebounded to previously lost
levels, demonstrating heightened volatility after a brief
consolidation phase just below $42,000. However, according to
CoinGlass’ liquidation heatmap, Bitcoin’s price may be facing
further volatility that could lead to a significant amount of
liquidation of both long and short positions. The liquidation
heatmap from CoinGlass highlights substantial indications of
liquidation leverage exceeding $200 million both above and below
the current Bitcoin price. Of particular concern is the thick
liquidation leverage below $41,000, as seen in the chart above,
which, combined with the prevailing trend, could become a probable
target for the Bitcoin price in the coming days. Related Reading:
Santiment Points Out Trigger Behind 65% Cardano Rally Conversely,
following BTC’s correction, additional liquidation leverage has
emerged in CoinGlass’s heatmap, particularly in the $42,000 and
$43,000 range of short positions. This added selling pressure has
contributed to the retracement of the Bitcoin price. This potential
scenario suggests a potential price swing up and down before a
stable continuation of either the downward or upward momentum. The
outcome remains uncertain as to which side will give way first and
what prevailing trend will shape the latter part of the year.
Featured image from Shutterstock, chart from TradingView.com
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