New Delhi: The cryptocurrency market eroded its gains on Thursday to trade lower following rate hike signals by the Fed at its next meeting. The central bank would steadily remove support for the economy in order to fight high inflation.
Barring the US dollar-pegged stable coins, all other eight out of the top-10 digital tokens were trading lower during the trade on Thursday. Bitcoin and Ethereum shed more than 2 per cent each, whereas Terra dropped 7 per cent.
The global crypto market cap dropped more than 2 per cent to the $1.62 trillion mark. However, the total crypto market volume rose more than 22 per cent to $103.97 billion.
What’s cooking in India
Indian cryptocurrency exchanges have recorded higher trading volumes in the past few days owing to extreme volatility in the market.
Many traders and investors liquidated some of the riskier tokens, rebalanced their portfolios by moving to stable coins and also indulged in opportunistic buying to average down their portfolios.
The ballooning popularity of Bitcoin and other digital currencies has given rise to a strange new political breed: the crypto mayor. Eric Adams, New York’s new mayor, accepted his first paycheck in Bitcoin and another cryptocurrency, Ether.
The Solana blockchain could become the ‘Visa of the digital asset ecosystem’ as it focuses on scalability, low transaction fees and ease of use, Bank of America told clients in a research note after hosting Solana Foundation member Lily Liu.
South Africa’s Sun Exchange, a solar power investing community that uses bitcoin to raise capital and to make payments to its investors, says it has completed the highest value crowdsourced project of any kind in Africa.
Despite some initial recovery in the crypto market, bitcoin and ethereum stopped short of their early gains, dipping in the early trade following the US Federal Reserves’ committed stance to reduce the size of its balance sheet, said CoinDCX Research Team.
“Even with the crypto market’s muted performance in January 2022, the sector is still attracting institutional investors and sovereign wealth funds,” it added.
Tech View by Giottus Crypto Exchange
Ethereum, the second largest cryptocurrency, has corrected steeply in the ongoing crypto market dip. It went from a high of $4,750 in December to under $2,200 in January. On its way, it broke through several crucial support levels, back tested them as resistance, and continued its downward journey. Today it trades in the $2,400-2,500 range.
The first step to resuming bullish momentum for Ethereum on the higher time frames would be to overcome resistance at the $2,775 and $3,150 levels. However, ETH has already dipped 10 per cent from its recent bounce, and will now need to first hold $2,380 as crucial support to prevent further drops.
If this level is lost, it is possible that Ethereum is an ABC correction that could send it forming a lower low – approximately 88.6 per cent of its bounce – located around the $2,250 level.
This may also complete a larger 5-wave correction for ETH and set the groundwork for a new bull run towards a new ATH. This is also subject to Bitcoin performing well in the next few weeks.
Support: $2,380, $2,250
Resistance: $2,775, $3,150