01 April 2022 | ZebPay Trade-Desk
ETH/BTC has picked up as of late, with accelerating momentum around the merge and its associated bullish narratives. Some are referring to it as a “triple halvening” and predicting a $10k token price this year, but ETH hasn’t really outperformed bitcoin since Q4. Yes, ETH/BTC is slightly off the recent “World War 3” lows, but it’s even further from the highs (nearly 20% to be exact) – a price that many feel is more than achievable in the near term. There’s likely room for this rally to continue and echoes the broader progression of BTC leading ETH, which in turn leads alts.
Of course, this ETH bull thesis is built upon the foundation of a safe risk-on environment. Events that could throw a wrench in that trade include a wildcard out of Ukraine, a shocking inflation print, an unexpected regulatory headwind, or the sudden realisation that the Luna Foundation is the only thing holding up the market. We’re happy to underwrite all of those risks for the time being.
Crypto assets will be taxed from the next financial year starting today. Union Finance Minister Nirmala Sitharaman in her Budget 2022 speech announced a 30 percent tax on income from virtual digital assets such as cryptocurrencies including bitcoin and Ethereum and non-fungible tokens (NFTs). The minister said there has been a phenomenal rise in such transactions and the magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime. Apart from this, there will be a 1 percent TDS and gift tax under certain conditions to be paid by the receiver of such digital assets as a gift. Investors would not be allowed to set off a loss in one crypto asset against another, mining infrastructure would also not be eligible for deduction as the cost of acquisition.
The FY end has sparked a degree of uncertainty in the minds of investors, and traders alike. USDT/INR saw a huge fall, as traders sold heavily yesterday. Premiums in the Indian market were completely washed off after USDT/INR fell by 7% or so, due to various profit booking and loss adjustments traders were trying to make before the new rules came into effect today.
The broader macroeconomic fear/disarray is an opportunity to gently scale into riskier assets at attractive prices. The overall sentiment isn’t necessarily bearish, but more of caution. Traders are buying the dips, hence markets continue to be in a consolidatory phase. Given the macroeconomic uncertainty, this is not a bad thing, but in fact a sign of maturity, and confidence among long-term investors.
Technical Outlook:
BITCOIN:
BITCOIN traded in green for the 8 consecutive sessions and the bulls managed to break the long held resistance of $45,500 making a weekly high of $48,189. However, the asset witnessed a profit booking at higher levels and the prices corrected almost by 8.2% and has dropped to $44,200. Currently, BTC is trying to take support at its 200 Day Moving Average ($44,500), if it bounces from these levels then we can expect the bulls to resume the up move. A close below the 200 day Moving Average will lead to further downfall and the prices can test $42,500 and $40,000 levels.
ETH:
ETH was trading in a range forming a ‘Symmetrical Triangle’ pattern. The asset finally gave a breakout above the range and after retesting the support started to move upwards making a ’Higher Top Higher Bottom’ pattern. After giving a breakout, the prices have surged almost by 20% making the weekly high of $3,482. The asset has strong resistance at $3,415 and the bulls are struggling to sustain and close above this level. Hence, to further rally ETH needs to close and sustain above $3,415. Once it does that then we can expect the prices to rally up to $3,650 to $3,800.
BAT:
BAT was trading in a range from $0.55 to $0.75. The asset finally gave a breakout above the range and rallied almost by 25% up to $0.936. However, BAT faced multiple resistance around the key level of $0.95 and witnessed some profit booking. Once it gives a close above $0.95 to $1, then we can expect it to further surge up to $1.15 to $1.3 whereas $0.75 will act as strong support for the asset.
Weekly Snapshot:
| USD ($) | 24 Mar 22 | 31 Mar 22 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $43,960 | $45,391 | 3.25% | $44,131 | $40,944 | $48,087 | $43,706 |
| ETH | $3,108 | $3,282 | 5.59% | $3,118 | $2,814 | $3,470 | $3,087 |
| MATIC | $1.63 | $1.62 | -0.61% | $1.63 | $1.45 | $1.75 | $1.57 |
| Cryptocurrency | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | 10.15% |
| Ethereum (ETH) | 5.91% |
| Polygon (MATIC) | 9.16% |
| Resistance 2 | $53,000 | $3,800 | $1.95 | $1.15 |
|---|---|---|---|---|
| Resistance 1 | $48,300 | $3,415 | $1.75 | $0.95 |
| USD | BTC | ETH | MATIC | BAT |
| Support 1 | $44,000 | $3,150 | $1.55 | $0.75 |
| Support 2 | $39,500 | $2,950 | $1.30 | $0.55 |
Market Updates:
- Bank of Japan (BOJ) has warned G7 nations that a common framework for regulating digital currencies.
- From April 1, a 30 percent I-T plus cess and surcharges will be levied in the same manner as it treats winnings from horse races or other speculative transactions, in India.
- The Securities and Exchange Commission (SEC) has listed crypto assets as an examination priority for market participants this year.
- Haruhiko Kuroda, the governor of the Bank of Japan (BOJ), has said the bank is currently not planning to launch a digital currency.
*Sources of charts:
https://cryptowat.ch
https://pro.zebpay.com/trade/USDT-INR
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 the Author is for informational purposes only and should not be treated as investment advice.
