Crypto Market Undergoes Correction as US Infrastructure Bill Faces Backlash

The global cryptocurrency market stood at $1.76 trillion today with a daily decline of 2.6 per cent as the US infrastructure bill, impacting crypto companies, faced opposition from crypto enthusiasts. After a strong rally leading into the weekend, trade volumes dipped by 7 per cent as Bitcoin (BTC) retraced post resistance at $45,000 levels.

BTC briefly crossed the $45,000 level for the first time in two months but sustained selling pressures at the 200-day moving average made it fall back to $43,600 as of 9 am IST, a marginal dip of 1.5 per cent. BTC trade volume across exchanges saw a considerable decline of 8.3 per cent amidst liquidation of $130 million BTC short positions post the $45,000 peak. It faces a short-term resistance at $44,000 levels now with key support at $40,690.

Ethereum (ETH), after rallying strong for over a week, had a healthy correction with a 5 per cent dip today. ETH closed the day below $3,000 although its weekly gains are still strong at 15 per cent. ETH, trading at $2,950, is now facing resistance at $3,000 while its support levels are at $2,770 and $2,640.

Top 20 cryptocurrencies declined as a result of BTC’s correction. Dogecoin (DOGE), Polkadot (DOT), Uniswap (UNI) and Chainlink (LINK) dipped by over 5 to 6 per cent while others took modest losses.

Investors are optimistic of BTC regaining momentum to break the $45,000 level in the upcoming days to sustain the growth in the broader market.

Top Gainers today:

1. Xinfin Network (XDC): 30.0%
2. Holo (HOT): 8.8%
3. Decred (DCR): 6.5%

Top Losers today:

1. Fantom (FTM): -9.8%
2. Axie Infinity (AXS): -9.2%
3. Enjin Coin (ENJ): -8.1%

The analysis includes the top 100 coins only as of 9 am IST

Source: CoinMarketCap

Crypto News at a Glance:

1. US Senators Mark Warner and Kyrsten Sinema presented an amendment to the US Infrastructure Bill last week that modifies a crypto tax reporting provision exempting proof-of-work and proof-of-stake validators. The bill, which also enforces stringent user identification procedures for crypto based companies, faces opposition from crypto enthusiasts as a ‘#DontKillCrypto’ campaign went viral on social media.
2. According to a report by gaming data aggregator InvestGame, blockchain gaming companies raised $476 million in the first half of 2021, accounting for 9 per cent of total gaming investments during this period.
3. Oscar Mayer, a unit of food giant Kraft Heinz, auctioned a single pack of Dogecoin-themed hotdogs for $15,001 on eBay.
4. Bitcoin short positions worth $130 million were liquidated yesterday across multiple derivatives exchanges such as Bybit, OKEx, Binance and Huobi as per Bybt.com, a liquidation dashboard. Ethereum short positions amounting to $234 million were also liquidated after the cryptocurrencies reached their multi-month highs.

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