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FX.co ★ Bitcoin drops amid Indian bill on cryptocurrencies

Bitcoin drops amid Indian bill on cryptocurrencies

Bitcoin regained its monthly lows and is trading around $56,000. Ethereum also slipped and remains in the $4,300 area. However, before we get into the technical picture of these trading instruments, we should mention the fact that India is preparing a bill to regulate cryptocurrencies.

New bill

Bitcoin drops amid Indian bill on cryptocurrencies

The new bill is likely to be introduced in Parliament in a session starting on November 29. According to the bill's description, Prime Minister Narendra Modi is proposing to help the central bank develop an official digital currency. However, at the moment, the full text of the draft law is not yet known or agreed upon, and a number of changes may be made. The statement says the bill seeks to prohibit all private cryptocurrencies in India but will allow certain exceptions to promote the underlying technology of cryptocurrency and its uses.

The Indian authorities do not have the best attitude towards the cryptocurrency industry in general, and it has only worsened in the last few years. The growing interest of the country's citizens in bitcoin and other altcoins is not much welcomed by the current government. It believes that cryptocurrency allows to hide income and evade taxes. In fact, authorities are concerned about loosening controls on money transfers and digital payments. In 2018, the Indian government effectively banned cryptocurrency transactions, but the Supreme Court lifted the restriction in March 2020. In recent months, authorities have called for stricter rules for virtual coin transactions.

Against the backdrop of the new bill, many investors are concerned that the government could ban cryptocurrency trading once the bill is introduced in parliament. Because of this, the bitcoin exchange rate pegged to the local currency has fallen very significantly. Bitcoin dropped 12.2% on one of the leading cryptocurrency exchanges, Wazirx, compared to an overall decline of only 1.8%.

Ripple hopes for best

Notably, Ripple is fighting with the SEC for quite some time. It's not just the coins that are at stake, but the company as well.

Ripple CEO Brad Garlinghouse says the legal battle with the United States Securities and Exchange Commission (SEC) is likely to be closed next year. Obviously, we won't see any better news this year. "We're seeing pretty good progress despite a slow-moving judicial process," Garlinghouse added.

The company has been making similar statements throughout the year, but the problem has not yet been resolved. "Clearly we're seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications," the Ripple executive said.

In December, the Securities and Exchange Commission sued Ripple, Garlinghouse and founder and executive chairman Chris Larsen, accusing the company of raising $1.3 billion in unregistered digital-asset securities by issuing XRP tokens. However, Ripple and executives argue that XRP should not be considered as a security.

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Bitcoin drops amid Indian bill on cryptocurrencies

As for XRP

A breakout of major support around $1 might increase the pressure on the trading instrument, which would open a direct path to the 0.8479 area. However, every time this level slumped, the bulls took advantage of the momentum and bought the cheaper asset. If it manages to get above $1.1775 resistance, then a return to $1.2895 and then a test of $1.41 can be expected.

As for Bitcoin

After another attempted rise to the $60,000 area, bitcoin lost ground very quickly and has now returned to major support at $56,400. Further growth of the trading instrument will depend on whether the bulls manage to regain control of the $60,000 resistance or not. If it manages to do that, a push up to the $64,000 area can be expected. If it breaks below $56,400, there will be problems. In that case, the pressure on bitcoin will increase and we will see a renewal of the lows of $53,600 and $50,900.

Bitcoin drops amid Indian bill on cryptocurrencies

As for Ethereum

Another renewal of $4,110 support returned demand for Ethereum, allowing bulls to drive the trading instrument to $4,360 resistance, a very problematic position for altcoin buyers. A break of this level would quickly bring Ethereum back to $4,578. If a breakout of $4,110 occurs, however, serious pressure on ETH is likely to return, paving the way to the lows of $3,885 and $3,682.

Bitcoin drops amid Indian bill on cryptocurrencies

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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