Dutch Unrealized Gains Tax Proposal Tests Crypto Market Structure in Extreme Fear

VADODARA, January 22, 2026 — The Netherlands is considering a radical tax reform that would impose levies on unrealized gains from cryptocurrencies and stocks starting in 2028, according to local media outlet NL Times. This daily crypto analysis examines how this regulatory proposal intersects with a market already gripped by extreme fear, potentially creating a liquidity grab scenario that could redefine long-term holding strategies.

Market Context & Background

Market structure suggests that tax policies are a primary driver of capital flows in digital asset markets. Historical cycles indicate that jurisdictions with favorable tax regimes, such as Portugal's zero capital gains tax for long-term holdings, have attracted significant crypto investment. The Dutch proposal represents a direct challenge to this dynamic, potentially forcing a reallocation of assets. This development occurs against a backdrop of global regulatory fragmentation, where measures like Spain's recent fan token supply revisions on Upbit have already tested market liquidity. According to the Federal Reserve's research on capital mobility, such tax changes can trigger rapid cross-border capital movements, especially in highly liquid markets like cryptocurrency.

What Happened?

According to NL Times, members of the Dutch House of Representatives (Tweede Kamer) are actively discussing a tax reform bill that would include both realized and unrealized profits from investment assets as taxable income. A majority is expected to approve the measure. If enacted, investors in stocks, bonds, and cryptocurrencies would be required to pay taxes annually on their assets' appreciation in value, even without selling them. This contrasts sharply with current global norms, where most jurisdictions tax only realized gains upon disposal. The proposal targets implementation in 2028, providing a two-year adjustment window but introducing immediate uncertainty into portfolio planning.

Technical Analysis & Price Action

Bitcoin is currently trading at $89,962, down 1.69% in 24 hours. The price action shows consolidation near the $90,000 psychological level, but volume profile analysis indicates weak buying interest. The Relative Strength Index (RSI) sits at 42, suggesting neutral momentum with a bearish bias. A critical Fair Value Gap (FVG) exists between $92,500 and $94,000, which must be filled to invalidate the current downtrend. The 50-day moving average at $91,200 acts as immediate resistance, while the 200-day moving average at $86,500 provides foundational support. Bullish invalidation is set at $85,000, a break below which would confirm a structural breakdown and likely trigger a cascade of stop-loss orders. Bearish invalidation lies at $95,500, where a sustained breakout would negate the extreme fear narrative.

By The Numbers

Why It Matters

For institutional investors, this proposal introduces a new layer of fiscal complexity that could deter allocation to Dutch-based crypto funds or entities. The requirement to pay taxes on paper gains may force premature liquidations to cover tax liabilities, creating artificial selling pressure. For retail holders, it undermines the "HODL" strategy by penalizing long-term appreciation without disposal. This could accelerate a shift towards jurisdictions with more favorable tax policies, fragmenting the European crypto . The timing is critical, as noted in Benjamin Cowen's 2026 analysis predicting precious metals outperformance, suggesting crypto may face multi-asset competition if regulatory burdens increase.

Community Sentiment

Market analysts on X/Twitter are expressing skepticism about the proposal's feasibility. One commentator noted, "Taxing unrealized gains ignores the volatility of crypto markets—forcing sales during downturns to pay taxes on prior gains could exacerbate crashes." Others highlight the administrative challenge of valuing illiquid altcoins annually. The sentiment aligns with the extreme fear index, reflecting concerns that such policies could set a precedent for other EU nations, creating a broader regulatory headwind.

Price Prediction / Future Outlook

Bullish Case: If the proposal is watered down or delayed, and Bitcoin holds above $85,000, a relief rally toward $95,500 is plausible. Institutional inflows may increase as investors front-run the 2028 deadline, creating a short-term gamma squeeze. Ethereum's bear flag pattern, signaling a drop to $1,850, could reverse if regulatory uncertainty eases.

Bearish Case: If the bill passes unchanged, expect sustained selling pressure as investors reallocate assets pre-2028. A break below $85,000 could trigger a liquidity grab, pushing Bitcoin toward $80,000. This would validate the extreme fear sentiment and potentially lead to a prolonged consolidation phase, similar to the post-2022 bear market structure.