May 16, 2022

Bitcoin Prices Look Volatile After News of India Ban

3 min read

A flurry of problem about exchange inflows and an India-wide crypto ban has apparently triggered a dip in Bitcoin rates. Market information, however, recommends that the drop was caused by over-leveraged longs.

Inbound India Ban May Affect Trading

On Sunday night, Reuters released an interview with a senior federal government authorities in India who mentioned that the nation will almost certainly prohibit cryptocurrency. The pending expense that might accomplish that ban will be soon introduced in a right-wing-dominated parliament.

The Indian official added that, in addition to a restriction on cryptocurrency trading and mining, holding cryptocurrencies will also be a crime punishable by as much as 10 years imprisonment. The report has actually reignited worry among crypto financiers in India.

Nevertheless, India’s Finance Minister Nirmala Sitharaman kept in mind in an interview on Saturday that the government will supply a “& ldquo; window of opportunity” & rdquo; for crypto experiments. She slightly mentioned “& ldquo; blockchain & rdquo; and & ldquo; Bitcoin & rdquo; in her note and revealed uncertainty around a blanket ban.

Though news of the law might have affected the marketplace, it has not stifled Indian trading completely. Bitcoin continues to trade at a premium on peer-to-peer (P2P) exchanges in India. On LocalBitcoins, the lowest market price is 6.6% greater than the international exchange rate, which suggests resilience among Indian crypto financiers.

Exchange Activity May Have Affected Prices

Another possible reason for Bitcoin’s cost drop was seen on Monday. Analytics firm CryptoQuant suggested that the U.S.-based exchange Gemini saw an inflow of about $1.12 billion. That occasion could have impacted Bitcoin’s circulating supply, and, in turn, its market value.

However, other analysts have actually contested those claims. According to Glassnode, the deals were internal: Gemini merely transferred funds in between its own internal wallets.

Furthermore, the 24-hour trading volume for Gemini was simply $138 million, making it unlikely that the deal was the result of user activity. The exchange has actually not talked about the matter.

Bitcoin rates fell from about $60,000 to less than $56,000 in the hours after the two occasions talked about above.

BTC/USD 30-minute chart. Source: Trading View Bitcoin Long Orders Have Been Liquidated In addition

to the two aspects gone over above, market ecstasy might be an active source of rate volatility.

Cryptocurrency long orders totaling up to $2.2 billion have been liquidated over the past 24-hours, according to Bybt information. Bitcoin dominated the liquidations at $1.7 billion; Ethereum followed with $212 million worth of liquidations. The majority of the liquidations ($900 million) were on Binance, followed by Bybt, Huobi, and OKEx.

Despite the decline, rates appear to be trending upward. The funding rate on Binance dipped just slightly listed below 0.1% in the drop. While there might be one more leg to this bull run, BTC gradually enters a corrective duration.

bitcoin fundng rate
< img loading =" lazy "class=" size-medium wp-image-83251"src="×440.png”alt=”bitcoin fundng rate”width=”742″height=”440″srcset=”×440.png 742w,×456.png 768w, 954w”sizes=”( max-width: 742px) 100vw, 742px”> Bitcoin continuous funding rate on Binance. Source: Binance At publication, Bitcoin traded at $56,500, revealing indications of a turnaround from the short-term bearish trend.

Other factors likewise contribute to a general bullish sentiment: brand-new U.S. stimulus cheques are on the method, while Tether has minted $800 million of its U.S. dollar-pegged stablecoin.

On the other hand, Bitcoin appears to be losing ground to altcoin dominance, raising the possibility of more slump in Bitcoin’s rate. Hence, crypto traders should brace for volatility today.

Disclosure: The author held Bitcoin at the time of press.