New Delhi: There was a bloodbath in the crypto market on Tuesday as top crypto tokens wiped out up to half of the investors’ wealth in just a few hours. Investors rushed to sell digital assets as if there was no tomorrow.
The euphoria over cryptocurrencies led by wider adoption, growing institutional interest and awareness of blockchain projects has fizzled out and is now being replaced by fear of higher interest rates, geopolitical turmoil and a looming recession.
Barring the dollar-pegged stable coins, all major crypto tokens and altcoins were bleeding. Terra tanked over 49 per cent, wiping off half of the investor wealth, whereas Shiba Inu‘s 17 per cent drop pulled it out from the top-15 crypto tokens.
The global cryptocurrency market cap was trading sharply lower at the $1.42 trillion mark, falling about 8 per cent in the last 24 hours. However, the total cryptocurrency trading volume zoomed about 85 per cent to $181.90 billion.
What’s cooking in India
In what could further dampen the mood of crypto investors in the country, the goods and services tax (GST) council is mulling a 28 per cent tax on cryptocurrencies, at par with the current GST on casinos, betting and lottery, multiple media reports claimed.
The services such as crypto mining along with sales and purchases are likely to attract the 28 per cent GST if the proposal goes through in the next GST meeting, according to reports. The date of the next GST meeting is yet to be finalised.
Bitcoin tested its support at the $30,000 level yesterday, which is the lowest since July 2021. It broke its short-term uptrend and now is seeing lower support between $27,000 to $30,000, said Edul Patel, CEO & Co-founder, Mudrex
Ethereum also hit a two-month low on Tuesday, he added. “Most cryptocurrencies have dipped significantly since the past week following a hike in interest rates and geopolitical tensions on the other side. The coming days would be
for the entire crypto spectrum.”
- There was a surprising amount of inflows to digital-asset funds, the first time money came into the funds in four weeks. This came despite a plunge in prices for bitcoin (BTC) and most other cryptocurrencies.
- Cryptocurrency exchange Coinbase Global, Inc. (COIN) will continue to face headwinds as the company is set to report first-quarter earnings on Tuesday after the market close.
- Meta CEO Mark Zuckerberg said in a video Monday that Instagram will begin testing non-fungible token (NFT) integrations this week.
- Luna Foundation Guard (LFG) will lend $1.5 billion in bitcoin (BTC) and terraUSD (UST) to defend the peg of its algorithmic stablecoin to the US dollar.
Tech View by Giottus Crypto Exchange
Ethereum, the second-largest crypto by market cap, has been falling along with the rest of the market. From a recent high of nearly $3,600, it now trades at barely above $2,200. However, this 40% drop isn’t as bad as it may look.
ETH has shown remarkable resilience given it has not lost value versus BTC, with the ETH/BTC pair virtually trading in a tight range since April. While it rejected from a key resistance level of 0.075, its price action represents a bullish picture for ETH, which will likely bounce faster once the market resumes a bullish sentiment.
In terms of dollar value, while ETH has lost an important support level near the $2,400 level and also a long-term support trend line, it still has a key level at $2,160 coming up that should put the brakes on further downside.
Post that, ETH will need to contend with $2,400 again and the psychological level of $2,500. This should align well with BTC at $33,300 – which is a relatively modest target for a relief rally for the biggest cryptocurrency, should it arrive.
Support: $2,200, $2,160
Resistance: $2,380, $2,500
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the asset/s mentioned.)