NEW DELHI: Major Cryptocurrencies tumbled as much as 21 per cent on Tuesday with market players getting jittery over China‘s expanding crackdown on Bitcoin mining and curbs on digital tokens. Following the recent volatility, top-10 digital tokens were trading with cuts at 9.30 hours IST, with three of them sliding between 14 and 21 per cent.

China’s central bank said on Monday it had summoned some banks and payment institutions recently, urging them to crack down harder on cryptocurrency trading. The People’s Bank of China urged the institutions to promptly cut payment channels for cryptocurrency trading.

China’s biggest banks promised on Monday not to help customers trade in Bitcoins and other cryptocurrencies and executives were told to step up enforcement of a government ban.

The four major state-owned commercial banks and payment service Alipay promised to step up monitoring of customers and block use of their accounts to buy or trade crypto-currencies.

“Over the course of the past week or so, crypto markets have seen a further downside as Bitcoins and Altcoins continue to ride the downward trend. Most analysts and traders continue to maintain a bearish stance across major assets. The short-term sentiment has turned bearish, and traders are closing their positions to hoard cash,” said ZebPay Trade Desk.

“This has in turn impacted BTC’s recovery journey, and the same can be implied among altcoins. Moreover, BTC took a beating after China broadened a crackdown on its massive cryptocurrency mining industry across some key provinces on Monday. However, at current levels, most major coins seem rather attractive, and whales have started to accumulate at these levels quite aggressively.”

Back home, the cost of buying Bitcoins and other cryptocurrencies may have increased about 2 per cent for investors who purchased them from exchanges outside the country as they are all set to face additional tax in the form of equalisation levy.

Also, top Indian crypto exchanges are in the final stages of joining IndiaTech, an industry association representing India‘s consumer internet startups, unicorns and investors, to increase pressure on the government to regulate crypto in India.

Tech View by Giottus Cryptocurrency Exchange

Bitcoin

Right now, Bitcoin is not singing a happy tune. It has broken down on a rising wedge and symmetrical triangle that it took over 4 weeks to form. Bitcoin is imitating the Wycoff pattern, and a crash will likely begin once the $29,000 support breaks. However, as with the previous three instances over the past month, it continues to hold $31-$32K as support.

Bitcoin has also been making a giant head and shoulders pattern since January 1 (one that investor Michael Burry himself tweeted this week). A Head & Shoulders pattern signals a bullish-to-bearish reversal – in Bitcoin’s case, a bull run that has played out since the start of 2021. The pattern’s neckline support is concluding at $29,000, further elevating the importance of that support.

Major Levels

Support: $31,000, $29,000, $27,000

Resistance: $33,400, $36,800, $39,200

Dogecoin (DOGE)

Elon Musk’s favored cryptocurrency Dogecoin (DOGE) has taken severe beatings over the last month. Compounded by the fact that Musk isn’t tweeting about it, the meme coin is on a downward spiral since rejecting its last resistance ($0.44).

Due to the recent BTC breakdown, DOGE broke down from the neckline support of a giant H&S pattern making it bearish. If the breakout is confirmed, the next critical support to look out for is $0.16. If broken, it may be free fall from thereon.

Fundamentally, there is much that needs to change to flip sentiment. Musk has talked about working with DOGE developers to increase its transaction throughput and reduce fees. But the market is yet to see any updates or results of such claims.

Major Levels

Support: $0.21, $0.18, $0.16

Resistance: $0.25, $0.28, $0.30

(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the asset/s mentioned.)