This week is tightly packed with multiple macro data coming in especially for Indian crypto investors. In today’s article, we will briefly touch on the macro factors that can induce volatility in the crypto market.
First and foremost, the finance minister of India Nirmala Sitharaman will deliver the Budget speech for the year 2023 this wednesday where govt resource allocation will be revealed. Along with the Budget filing, comes the latest tax rules which will be keenly watched by crypto investors across India.
Last year, almost the entire Indian crypto market was left shocked with the new tax regime which mandated 30% tax on all crypto profits and a 1% TDS (tax deducted at source) on every transaction. This led to a massive decline across all exchanges in India as unhappy investors quickly booked profits or moved to international markets. While applying TDS helps governments to track money, 1% on every transaction was uninviting as it dries up the funds pretty quickly if you are a frequent trader.
According to policy experts, India is unlikely to do a tax cut. While the recommendation from the crypto industry is to reduce the TDS, investors have to wait out and see.
The Federal Open Market Committee (FOMC) statement is also coming tomorrow which is a global cue for markets to price in the interest rate hikes. While there is a global consensus on a 25 bps rate hike tomorrow, any subtle tone shifts from the chairman can drive volatility to extreme levels. On Thursday, UK and EU central banks will also have their press conference. Even though crypto investors are not required to keep a close watch on them but worth accounting for volatility. On Friday, US jobs data is kicking in with expectations of the unemployment rate to go up from 3.5% to 3.6%.
As one can note, this week is tightly knit with multiple factors in line for the markets to react. Considering jobs data, Fed’s tone might be dovish on Wednesday. From a traders perspective, short-term positioning for this week might be impossible.
Bitcoin is likely to register a 35%+ monthly candle eyeing a bullish monthly close. Both the weekly and monthly charts are looking strong and looking to close above their key levels. Bitcoin is currently oscillating at range highs which will stop it from catapulting to $30,000 levels. We will soon find out whether this pump is purely based on expectations of the Fed turning dovish or if it is based on something else.
Looking at the daily time frame on BTC, we can see how both lower highs were respected as Bitcoin accumulated around those levels. Currently Bitcoin is trading above $22,800 and is approaching the monthly resistance level near $23,300. The worst case scenario would be a big rejection of the range high and Bitcoin plunging back below $20,000, in that case defending the $18,710 level is of key importance if we want to remain bullish. Another breakdown below $18,710 would indicate further downside and bring the $14,000 monthly level back into play.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.