Russian President Vladimir Putin has endorsed into law the legalization of cryptocurrency mining in Russia, sparking dramatic gain for Bitcoin toward $60,000.

Russian news agency TASS captured this latest regulation in a fresh publication. The report highlighted that the new legislation introduces several crucial concepts, including virtual currency mining, mining pools, and mining infrastructure operators.

According to the report, Russia now recognizes mining activities as legitimate business activities rather than simply the issuance of digital currency.

Guidelines for Crypto Mining in Russia

The law also outlines specific guidelines for who can engage in cryptocurrency mining. Only Russian legal entities and individual entrepreneurs who are registered with the government can participate. However, individual miners are exempt from registration requirements if they keep their energy consumption within the limits set by the government.

Additionally, the report highlighted that foreign digital financial assets will be allowed to be traded on Russian crypto platforms. However, the Bank of Russia will have the authority to prohibit listing specific issues if it determines that they threaten Russia’s financial stability.

In a previous meeting with the government to discuss economic issues, Putin expressed his enthusiasm for virtual currencies’ potential. He stressed the significance of Russia taking swift action to establish a legal framework, develop infrastructure, and create an environment conducive to the circulation of crypto assets, recognizing it as a promising area for economic growth.

According to the report, the law will become effective ten days after its official publication date.

Bitcoin Reacts, Heads to $60K

Remarkably, the news of Russia permitting crypto mining has stirred the crypto market with dramatic gains. In particular, Bitcoin has surged toward the $60K region after rallying by 6% just a few hours ago. Other crypto assets have followed the trend. At press time, Bitcoin hovers around $59,600. 

Russia’s Bill to Trade Crypto

Notably, this latest development comes just two weeks after Russian lawmakers passed a bill permitting businesses to utilize cryptocurrencies in international trade. Observers see this as an effort to circumvent Western sanctions imposed on Russia following its invasion of Ukraine.

The law will take effect in September. According to Elvira Nabiullina, the Governor of the Russian Central Bank, the first cryptocurrency transactions are expected to occur before the end of the year.

Russia has been grappling with significant delays in international payments with major trading partners such as China and the United Arab Emirates. This is largely because, under pressure from Western regulators, banks in these countries have become increasingly cautious in their dealings with Russia.

The latest collapse in the price of Bitcoin has sparked significant indications that the bear market could already be at large, experts warn.

Bitcoin slumped to $49,000 on Monday from as high as $61,000, wiping out billions of dollars from leveraged traders. In reaction, Ethereum came close to losing the $2K threshold. Likewise, Solana (SOL) almost plunged back to below $100. 

Remarkably, by the next day, Bitcoin reclaimed $55K, helping Solana rally back to $150. While Bitcoin continues to defend recent gains, exhibiting signs of continuation toward $60K, the bearish fears have not yet disappeared.

Early Signs of Bear Market

In a recent update, Julio Moreno, head of research at the analytics platform CryptoQuant, revealed that the Bull-Bear Market Cycle Indicator signaled a BEAR phase on Tuesday for the first time since January 2023.

Moreno highlighted that previous instances when the indicator briefly flagged a BEAR phase included the COVID-19 market crash in March 2020 and the Chinese mining ban in May 2021. It also accurately predicted the onset of the bear market in November 2021.

The observation has drawn considerable attention within the crypto community. Responding to the findings, Ki Young Ju, founder of CryptoQuant, stated that as long as Bitcoin’s price remains above $45K, it has the potential to reach a new all-time high within a year.

He acknowledged that some market indicators have flashed bearish signals since the recent steep drop. However, Young Ju suggested that these signals could reverse if a rebound occurs.

As a result, he suggested observing Bitcoin’s performance over the next week or two for further confirmation. Young Ju noted that if it remains stuck around its current threshold for an extended period—particularly longer than a month—it could signal a weakening market sentiment. 

Accordingly, the risk of entering a prolonged bear market increases, and recovery could become more challenging when bearish conditions persist beyond this period.

Indicators Flashing Bullish Signal

Interestingly, some other indicators are giving market participants reasons to remain bullish. In a separate update, on-chain analyst Ali Martinez pointed out that the crypto market has returned to a state of extreme fear, which he believes presents a prime buying opportunity for Bitcoin.

In an earlier post, Martinez noted that while short-term holders were liquidated during the recent dip to $49,000, long-term holders were actively accumulating. He highlighted that these long-term holders added over 184,500 BTC to their portfolios, worth approximately $10 billion.

Supporting this trend, recent data shows that more than 404,000 BTC, valued at over $23 billion, have been locked in long-term holders’ wallets.

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