First Mover Asia: India crypto investors await taxation clarity; Bitcoin rises on a day of big price swings

India's crypto community is hoping to convince lawmakers to scale back a crypto taxation bill; bitcoin soared above $41,000.

Good morning. Here’s what’s happening:

Prices: Bitcoin went on a roller coaster ride but also rose above $41,000.

Insights: India's crypto community awaits a finance bill that will clarify the government's approach to crypto taxation.

Technician's take: BTC pared earlier losses; support at $37K and resistance at $45K.

Prices

Bitcoin (BTC): $41,609 +3.8%

Ether (ETH): $2,754 +6%

Top Gainers

Asset	Ticker	Returns	Sector
Chainlink	LINK	+6.8%	Computing
Polkadot	DOT	+6.5%	Smart Contract Platform
Cosmos	ATOM	+5.9%	Smart Contract Platform

Top Losers

There are no losers in CoinDesk 20 today.

Bitcoin rises on a day of price swings

Bitcoin was well into the green over the past 24 hours, although not before experiencing a roller-coaster ride of steep ascents and dips spurred by news events, including economic fallout from Russia's invasion of Ukraine and the widely expected decision by the U.S. central bank to raise interest rates.

The largest cryptocurrency by market cap had soared past the psychologically important threshold of $40,000 early Wednesday morning (UTC time) and then climbed past $41,000 over a roughly 90-minute period. The source of the quick spike remained unclear, although some market observers believe it was tied to China's pledge to support its real estate and tech industries, a move that calmed investors who have been abandoning stocks in droves after a regulatory crackdown and recent slowdown in the country's storied economic growth.

After dropping under $40,000 on two occasions during Asian and U.S. trading hours, bitcoin was changing hands again above $41,000, up about 4%.. Ether, the second-largest crypto by market cap, was trading at nearly $2,800, a roughly 6% gain. Most other major altcoins had gained ground over the past 24 hours.

Ukrainian President Volodymyr Zelenskyy signed into law a bill that legalizes crypto in the country. Ukraine has been using a flood of digital asset donations to support the country's defense against a Russian invasion. In an impassioned speech delivered virtually, Zelenskyy asked the U.S. Congress to provide more support and to strengthen sanctions against Russia. "We need such principles of European business that the Russian state does not have the money to ruin lives," he said.

The Federal Reserve decided to raise interest rates 25 basis points and indicated it would increase rates in similar increments six more times in 2022. The Fed has adopted a more hawkish stance to tame rising inflation but without sending the U.S. economy into recession.

Ben Emons, the managing director of global macro strategy at Medley Global Advisors, said crypto markets had largely already priced in the interest rate increase. "It's a fair point to say that there's been anticipation in the affect of rate hikes," Emons told CoinDesk TV's "First Mover" hosts, adding: "As [for] the Fed signal it's ready to do this faster, that's not priced in."

Markets

S&P 500: 4,358 +2.2%

DJIA: 34,063 +1.5%

Nasdaq: 13,436 +3.7%

Gold: $1,946 -0.4%

Insights

India awaits crypto taxation clarity

India’s crypto community will likely have to wait till next week to receive clarity on new tax rules.

This after India’s Parliament websites did not mention the introduction of the finance bill that is expected to explain the government's crypto taxation policies. At least one source said the bill is unlikely to be introduced on the last working day of the week, Thursday. The week is shortened as Friday is a holiday celebrating Holi, one of India’s most significant festivals.

The delay gives India’s crypto community more time to mobilize and express themselves to the framers of the bill. Since the announcement of the proposed taxation, crypto supporters have been knocking on the doors of the finance ministry, holding informal and formal conversations urging them to make changes.

The current tax proposal includes a 30% tax on any income generated from crypto transactions and a second tax of 1% at source on all transactions (tax deducted at source, or TDS). Expectations are low that the government will roll back the 30% tax but the industry is hopeful the 1% TDS could be tweaked.

A change.org petition asking for a reduction in the 30% tax and the 1% TDS, among other demands, has already received around 100,000 signatures out of the 150,000 sought.

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Meanwhile, as the world is laser-focused on watching whether crypto is being used by Russia to avoid sanctions, Afghans are using crypto to avoid U.S. sanctions, according to BBC.

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China looks to allay investors' fears

China’s top financial policy committee, the Financial Stability Development Committee of the State Council, promised to keep the market stable by easing a regulatory crackdown and supporting property and tech companies.

During the afternoon trading session following the China State Council’s decision, Hong Kong's Hang Seng stock market, which has been buffeted in recent months, posted double-digit gains..

Technician's take

Bitcoin daily price chart shows support/resistance, with RSI on bottom. (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) pared earlier losses and returned above $40,000 toward the end of the New York trading day. The cryptocurrency experienced wild price swings over the past few days, which typically occurs during times of low trading volume.

For now, support around $37,000-$40,000 remains intact, although resistance toward $45,000 could stall the upswing in price.

The relative strength index (RSI) on the daily chart continues to rise from an oversold reading on Jan. 21. Still, price jumps have been capped at resistance over the past two months, indicating persistent selling pressure.

On a positive note, BTC could see additional price gains if the daily RSI remains above 50, which could signal the end of the four-month long downtrend.

Important events

South by Southwest (SXSX)

8:30 a.m. HKT/SGT(12:30 a.m. UTC): Australia fulltime/part-time employment (Feb.)

5:30 p.m. HKT/SGT(9:30 a.m. UTC): Speech by European Central Bank President Christine Lagarde