02 June 2021 | ZebPay Trade-Desk
The leading assets by market capitalization, as well several altcoins, seem to have started a relief rally and most of them have been on an uptrend the past week. Bitcoin (BTC) and Ethereum (ETH) saw a massive drop in the third week of May, both falling by ~50%, and so did major Altcoins. This trend suggests that traders have started to buy at these lower levels, helping recovery set in. The decline has had a dual impact on the crypto community, with long-term investors citing this fall as a buying opportunity, while on the other hand, short-term traders are using this opportunity to exit their positions out of fear that markets will go down further. Institutional investors have used this correction to add BTC to their portfolios, as BTC acts as a good hedge against inflation and dominates the crypto marketplace. This does not necessarily mean that a rapid recovery will set it, but it does suggest that the asset has strong fundamental metrics. We anticipate that prices are likely to remain fairly range-bound over the next few days. As BTC and ETH, typically define the market trend, and altcoins more often than not follow the trend with a slight delay, we anticipate major altcoins to also behave similarly.
In addition to that, investor sentiment in India has also improved over the past few days, as The Reserve Bank of India (RBI), on Monday gave some clarification around BTC and cryptocurrency trading, addressing banks, saying that they cannot warn customers against trading, as there is no law against that as of now. Moreover, there have also been reports circulating which suggest that the government might put in place a separate advisory committee to discuss and regulate crypto trading and activities in India. Both these factors have led to a positive sentiment emerge and are likely to fuel further recovery.
Over the past week, BTC has shown an uptrend in this pair. Prices have recovered by almost 15%, and the BTC/INR pair currently trades at ₹28,10,710. After the BTC crashed, prices fell to as low as ₹23,25,000, and since then, accumulation at lower levels has been seen and that is probably why volumes have held up well. For BTC to go further up it needs to break and sustain above the resistance level of ₹31,50,000.
At these levels, the asset looks a lot more attractive, volumes have also picked up a little as traders have started to buy in. This has resulted in an uptrend, which currently persists and has driven prices up. In addition to that, the BTC price is in the green again, as investors have gained more confidence, especially as India seems to be moving in a positive direction with respect to crypto adoption and regulation.
ETH has proved to be one of the most popular assets among investors in India. ETH post making the all-time high of ₹3,50,000 saw a massive correction and fell to a low of ₹1,25,000. However, since then, over the past 2 weeks, the asset has recovered significantly, up by almost 60%, and currently trades at ₹2,01,599. The asset faces strong resistance at ₹2,23,000. For the prices to further rally, it needs to trade and close above these resistance levels whereas ₹1,73,000 will be an important support level to watch out for.
The sentiment that continues in the asset is very much positive, both globally and in India. As the ETH blockchain adopts the PoS architecture, coupled with the upcoming protocol upgrade anticipated in late June/early July, ETH is sure to be fundamentally strong. The recovery the asset has seen reflects the investor confidence in the asset. This means that at lower levels, as such, traders and investors are likely to buy-in. Moreover, ETH’s infrastructure provides for wide applicability in the DeFi space, and the lower cost of acquisition vs BTC makes it very attractive.
At the time of writing, USDT-INR is trading around ₹77.1 reflecting a loss of about 4% approximately over the period of 24-hours. USDT-INR is trading in an uptrend this week. We can see USDT is taking support at ₹75.91 levels, and resistance at a level of ₹80. We expect USDT/INR to hold these levels, though it may be range-bound. Given that the rupee has appreciated slightly, coupled with the volatility of markets, this week, we remain cautious on what might be next for the pair.
The pair is operating with ~7% premium, compared to its traditional counterpart. This is usually what the Indian market traditionally witnesses. This comes thanks to the slight recovery INR has shown vs USD, which has made the pair more competitive. Moreover, BTC, ETH, and other altcoins have all seen corrections over the past 2 weeks, followed by another uptrend movement, as the recovery has started to set in. This suggests that, in order to participate in the correction and to book profits during periods of corrections, first traders liquidated their assets in this pair, squared off positions, creating a one-way swing in the market, as demand for USDT spike sup to profit book, which has significantly contributed to the pair’s volatility, and this has further contributed to the appreciation in the USDT-INR pair week on week basis, and we believe this is likely to continue.
The next week or so is crucial for these assets. While the bearish stance among the community might persist for some more time, BTC and ETH have started to see strong signs of recovery, and have been in an upward trend over the past 2 weeks. This week has predominantly been in the green, which indicated that markets have started to show some respite.
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We hope this report helps dive a little bit into these INR pairs! Happy Trading with ZebPay!
Disclaimer: This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice.