Indian crypto industry and government officials have continued to discuss possible changes to regulations announced earlier this month; bitcoin returns to its perch above $38,000
Good morning. Here’s what’s happening:
Markets: Bitcoin recovers from its late Wednesday fall, stabilizing above $38,000.
Insights: India passes crypto advertising guidelines and continues its regulatory debate.
Technician’s take: There are initial signs of downside exhaustion, although upside appears limited for bitcoin.
Bitcoin (BTC): $38,202 +2.9%
Ether (ETH): $2,586 +0.2%
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Bitcoin’s freefall following Russia’s invasion of Ukraine halted just below $35,000 during the early hours of Thursday morning. By mid-afternoon, the largest cryptocurrency by market capitalization had regained the perch it has held for much of the week above $38,000.
Trading volume reached its highest volume in a month.
In an email, Oanda Americas Senior Market Analyst Edward Moya wrote that bitcoin was performing like the “ultimate risky asset, tumbling hard after Russia launched its attack.”
At the time of publication, bitcoin was trading at about $38,200, up about 3% over the previous 24 hours. Ether was roughly flat at about $2,600. Most other altcoins in the top 20 by market cap were in the red, although Terra’s LUNA was up over 9%. Solana (SOL) and bitcoin cash (BCH) were also up, albeit less significantly.
Moya said that bitcoin holding “onto the $30,000 level over the short term would be a good sign, indicating that investors were “still upbeat about the economic outlook and that risky assets should stabilize once the Russian/Ukraine crisis impact is better understood.”
But he added a more somber note, saying fears of a recession occurring over the next two years “could trigger many institutional investors to abandon the crypto ship.”
S&P 500: 4,288 +1.5%
IA: 33,223 +0.2%
Nasdaq: 13,473 +3.3%
Gold: $1,902 -0.3%
The Ongoing Debate on Regulation in India
As air raid sirens blared in Ukraine’s capital, India was focusing on evacuating its students from Ukraine. But its crypto-sphere was busy with new advertising guidelines, ongoing discussions between government and industry about taxation, news on why India’s crypto regulation may have been delayed and a day-long conference about non-fungible tokens (NFT).
India’s advertising guidelines were highly anticipated because the government had sought to stop misleading ads on cryptocurrencies. Now crypto ads will require a disclaimer saying “crypto products and [non-fungible tokens] are unregulated and can be highly risky.”
“We have not said don’t make crypto adverts, just communicate the risks as much as the good about the product,” said Manisha Kapoor, the secretary-general of the Advertising Council of India in a radio interview on Thursday.
Formal and informal discussions between India’s crypto industry and the government are ongoing. CoinDesk has learned that after exchange companies met senior officials at a hush-hush gathering at the Indian Finance Ministry a few days ago, more discussions are expected later this week.
On Feb. 1, the government announced new crypto taxation proposals that will become formalized in a few weeks, making this period critical for the industry to seek changes. The new rules include a 30% tax on all crypto gains and 1% tax deducted at source on all crypto transactions.
Meanwhile, Michael Patra, the deputy governor of the Reserve Bank of India, has said the central bank’s views about cryptocurrencies might have delayed the government’s proposed legislation on crypto assets, according to the Press Trust of India, the country’s largest news agency.
NFTs had their moment in the spotlight on Thursday. The Internet and Mobile Association of India (IAMAI), which leads consultations with the government on crypto, held a day-long NFT virtual conference titled “NFT India – A peep into the future of NFT in India.” Indian cricket legend Zaheer Khan and singer Shaan were among the featured speakers. Both stars have dropped NFTs in recent months.
Public interest in the phenomenon has been rising steadily in India as it has elsewhere. The conference addressed this growth and potential opportunities.
Bitcoin Selling Stabilizes; Support at $30K Could Limit Correction
Bitcoin (BTC) extended losses early in the New York trading day and broke below intraday support at $36,500. At press time, the cryptocurrency appears to be stabilizing above $38,000. Resistance is nearby at $40,000, and stronger support is seen at $30,000.
On the daily chart, downside exhaustion signals are starting to appear, similar to what occurred on Jan. 24, which preceded a 30% price jump. This time, however, the relative strength index (RSI) is not deeply oversold, which could delay a potential upswing in price.
Momentum signals remain negative on weekly and monthly charts. That means BTC is vulnerable to further declines. The next two weeks will be critical to determine if buyers have enough conviction to defend the $28,000-$30,000 support zone.
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