After hitting a six-month low in the first month of the year, Bitcoin, the most active cryptocurrency, recovered nearly 15 per cent to trade at $37,600 levels at the time of this article. Bitcoin, along with many other cryptocurrencies, had a fantastic yet volatile run in 2021, hitting all-time highs.
Negative sentiments prevailed
The price correction was imminent to test the support levels. Despite some bargain buying at lower levels by both institutions and retailers, many remained on the fence due to the overall negative sentiments in the financial markets.
The revelation about Wonderland’s chief architect added more debt to the cryptocurrency market cap, as many asset-pegged tokens tanked nearly 50 per cent.
Regulator’s rudeness
Restrictive measures taken by countries with strict capital control regimes have also fuelled the sharp price corrections. The Central bank of Pakistan, People’s Bank of China and Bank of Russia have all indicated that they are still not in a mood to regulate cryptocurrency assets.
It will be interesting to see what direction the Indian government will take during the Budget session. It is quite evident that the central banks across the globe are not in sync when it comes to cryptocurrency.
The flip side
When countries like El Salvador, UAE and Turkey are mulling for wider adoption of cryptocurrencies, Asian central banks have observed a wait and watch approach. The IMF’s request to El Salvador to drop Bitcoin as legal tender and Turkey President Erdogan’s request to examine the use of cryptocurrency further confirms that we will witness a volatile cryptocurrency market for the year 2022.
Top five gainers for the week:
- Render Token (RNDR): 63% up
- Flow (FLOW): 40% up
- Bora (BORA): 30% up
- The Sandbox (SAND): 29% up
- Loopring (LRC): 28% up
Top five losers for the week:
- Terra (LUNA): 26% down
- PancakeSwap (CAKE): 12% down
- Kusama (KSM): 11% down
- Cosmos (ATOM): 9% down
- Quant (QNT): 8% down
(Note: Data as of 12.00 noon IST, January 30, 2021; Source: Coinmarketcap.com)
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