News Updates January 31, 2023
1. Bitcoin Suffers Largest Daily Plunge Since November to Sink Below $22.6K as Fed Meeting Looms
The largest cryptocurrency by market capitalization was recently down over 4.5% amid ongoing worries about inflation and the size of the next interest rate .
Markets
Bitcoin Suffers Largest Daily Plunge Since November to Sink Below $22.6K as Fed Meeting Looms
The largest cryptocurrency by market capitalization was recently down over 4.5% amid ongoing worries about inflation and the size of the next interest rate hike.
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Bitcoin dipped below $22,600 at one point Monday to record its biggest single-day percentage loss since early November when the FTX meltdown sent the crypto market reeling.
The largest cryptocurrency by market capitalization was recently trading at about $22,720, down more than 4.5% after climbing over $23,900 on Sunday for the first time since mid-August. Ether (ETH) dropped 5% to trade around $1,550 Monday. The CoinDesk Market Index was down 4.8% for the day.
The last time BTC lost such an amount in a day was Nov. 9 when BTC plunged 14%, according to data from TradingView.
Some $44 million worth of BTC long positions were liquidated in the past 24 hours, part of a broader crypto market's Monday decline, according to Coinglass data.
Crypto-exposed stocks also sank, reflecting investors’ nervousness about the crypto market.
Exchange giant Coinbase (COIN) closed down over 8%, while bitcoin miner Marathon Digital Holdings (MARA) sank around 10%.
“Bitcoin is declining as Wall Street becomes very defensive ahead of this week’s major risk events,” Edward Moya, senior market analyst at foreign exchange Oanda, wrote in a Monday note.
Traders are expecting the U.S. Federal Reserve to raise interest rates by 25 basis points (bps) at its Federal Open Market Committee (FOMC) meeting, which begins Tuesday, although some analysts believe that a 50 (bps) hike remains a possibility amid ongoing worries about inflation.
Bitcoin’s recent resistance below $24,000 underscores this concern, and Moya noted that “for crypto to have any underlying support given all the regulatory and contagion fears, inflation risks need to go away.”
He added: “Bitcoin has massive resistance at the $24,000 level, so if risk aversion remains in place, downward momentum might not find major support until the $21,000 region.”
2. India Crypto Ecosystem Let Down With No Reduction In Tax
Nirmala Sitharaman, the finance minister of India, placed the budget for 2023-24 in the country's Parliament on Wednesday.
India crypto news: India finance minister Nirmala Sitharaman placed the budget for 2023 in the Parliament on Wednesday. There was no mention of any plans or tax relief for the trading of cryptocurrencies and other Virtual Digital Assets (VDA) in the country. This comes amid low hopes on lowering of crypto taxes but the crypto community was hoping for positive outlook for the future. The government announced the plan to launch the national financial registry in India
Crypto Tax In India
With the introduction of crypto taxes in the last financial year, India currently has one of the world’s harshest taxation policy for trading of cryptocurrencies. Classified as Virtual Digital Assets (VDA), the crypto assets come under the highest tax slab of 30% in the country. This is same bracket as the 30% tax levied on gambling industry in the country. In addition to the high tax, a 1% tax deductible at source (TDS) is implemented on VDA trading of above Rs 10,000.
