Daily Market Recap - India Seeks to Ban Bitcoin

After setting a new all-time high above $61,000 over the weekend, Bitcoin has corrected, falling back below the key $60,000 mark, and further dropping to a low of around $57,800 at the time of writing, shedding almost 5% on the daily chart.

This correction could be explained in part to some profit-taking after this weekend's new all-time high, but it also seems that the decline posted by BTCUSD since yesterday can be traced to a very specific factor: The possible banning of cryptocurrencies in India.

While many countries are embracing the development of the crypto sector and the adoption of Bitcoin as a new investment asset comparable to gold, other countries like India are taking a completely opposite direction.

India will indeed propose a law banning crypto-currencies, imposing fines on anyone conducting crypto transactions in the country, or holding such digital assets. The bill would criminalize the possession, issuance, mining, trading, and transfer of crypto assets.

This is in line with the government's agenda in January, which called for a ban on private virtual currencies such as bitcoin and the establishment of a framework for an official digital currency. The bill would give holders of cryptocurrencies up to six months to liquidate them.

This would be some of the toughest anti-crypto legislation in the world. For comparison, China has banned the mining and trading of cryptocurrencies but does not go so far as to penalize possession.

Also note that according to Reuters, officials are confident that the bill will pass, as Prime Minister Narendra Modi's government has a comfortable majority in Parliament.

If confirmed, this would undoubtedly be a massive blow to the entire cryptocurrency industry, and this prospect alone justifies caution on Bitcoin and other cryptocurrencies. Indeed, it is widely believed that the biggest threat to cryptocurrencies is regulation, and India's stance is a reminder of just how radical the decisions of governments and regulators could be.

(Chart Source: Tradingview 15.03.2021)

However, from a technical perspective, Bitcoin still has plenty of room to correct without challenging its underlying longer-term uptrend. A trade below the $52,000 mark will be the first test to evaluate whether a stronger correction can come to term. For now, the bullish case for BTCUSD still holds with the upside objective set at clearing back above the $60,000 level.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.