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A dramatic drop in the price of Bitcoin and other cryptocurrencies has dealt a further setback to India's already sagging cryptocurrency sector.
Since November of last year, when Bitcoin values peaked at $68,000 in international markets, global and local prices have been trending lower. The price of the most popular cryptocurrency, Bitcoin, has plummeted in recent months.
The price of bitcoin has dropped about 30% in the last week, from around $30,000 levels. The drop has been more than 35% in the last month. It has dropped by 48% and 58% in the last two and six months, respectively. Bitcoin is currently selling at roughly $21,100.
The bulls are expected to purchase and take a position in the area of $20,000-21,000, according to Nigam Arora, an Algo trading expert and creator of The Arora Report. If Bitcoin goes below $19,000, according to Arora's research, there will be many more margin calls. If these margin calls come through, the next target zone will be $15,000 to $16,000. Everything will depend on how far the bulls can rally from here.
Arora had predicted that Bitcoin will fall below $21,000 approximately a month ago when the cryptocurrency was valued at $31,280. MicroStrategy, a heavily leveraged cryptocurrency investment business, was a sitting duck because it would face a margin call if Bitcoin fell below $21,000, according to his call. The average cost of MicroStrategy was around $30,000.
Other analysts, like Arora, predict Bitcoin will reach a bottom below $20,000. After then, the market for cryptocurrencies will be sideways. Therefore, the idea of getting rich quickly by investing in crypto may be finished.
Celsius Network, a large worldwide cryptocurrency lender, halted all swaps, withdrawals, and account transfers on Sunday, citing adverse market circumstances. The business has now hired a financial restructuring lawyer.
A significant cryptocurrency hedge fund is rumoured to be facing a $400 million insolvency test, according to another revelation on Wednesday morning from one of the most outspoken participants in the cryptocurrency industry. According to market rumour, the company's investment in Luna was wiped away.
Bitcoin, according to Sidharth Sogani, founder and CEO of CREBACO Global, a cryptocurrency research and rating firm, is no exception to the global financial market crumbling. Sogani believes the price is currently finding support, with a potential bottom around $20,000, and a worst-case scenario of $18,000. However, the market as a whole is in a bear market.
The Indian cryptocurrency business has been plummeting since the adoption of the new tax framework. A growing number of blockchain engineers, entrepreneurs, and other ecosystem members are relocating to other markets. The majority of traders who provided liquidity to India's bitcoin industry have gone out of business. A mix of Indian and international traders are among them. Many of the traders were high-net-worth individuals, as well as high-frequency traders and liquidity providers. This is also the cause of the dramatic drop in volume.
The majority of exchanges have begun to reduce costs, particularly operating expenditures. Barring a few top players, survival will be an issue for many.