WazirX exchange’s native token WRX benefited the most from India’s recent crypto spin this week.
WRX price increases on tax news in India
WRX price surged nearly 30% to above $1 to hit a 3-week high after the Indian government announced a new tax regime for the crypto sector in the region and radically changed its strict stance before even introducing one considered a complete ban on this burgeoning industry.
— Yo! Crypto 🏻 (@YoCrypto) February 1, 2022
During his budget speech on Tuesday, Finance Minister Nirmala Sitharaman said the government plans to tax earnings from cryptocurrency trading at 30%, one of the highest rates in the world. It also means that digital assets will be recognized in India and may soon have legal status.
WRX’s price rose following Sitharaman’s speech, likely due to its association with India-based exchange WazirX. WRX is a utility token on the platform that will benefit users through transaction fee discounts and access to new token airdrops.
Coming soon one 250% rally is different?
Utility tokens often derive their value from speculation about how they will grow along with the development of the platform – a platform that is no longer in regulatory limbo.
Javon Marks, an independent market analyst, has predicted another price explosion in the WRX market, noting that the WazirX token could surge to $3.8 from the current $1. The main reason for its uptrend is the technical setup as shown in the attached chart.
Source: Javon Marks
In particular, the current price breakout has helped the WRX break above a multi-month down sloping resistance trendline. Marks noted that the breakout “technically” gives the WazirX token another 252% gain in the coming sessions to meet its April 2021 resistance target.
“As long as WazirX holds this breakout level, the target is still achievable,” the analyst wrote tweet On Wednesday.
The statement comes as the entire crypto market is in turmoil after a sluggish run in January. WRX itself is down over 30% over the month, similar to many top-tier cryptocurrencies. , which includes Bitcoin, fell nearly 18 percent in January over the same period.
Temporary pullback scenario
However, WazirX’s daily correlation with broader crypto market trends puts WRX at risk of further downside. This is largely because the catalysts that played a key role in pushing the digital asset lower in January 2022 are still intact – the dovish stance of the US Federal Reserve.
Additionally, WRX price is facing a confluence of technical resistances that could limit the rally in the coming sessions. In particular, the combination of price caps, including the descending triangle’s upper trendline, limited the token’s upside attempt.
USD price chart and Construction of the descending triangle | Source: TradingView
Other resistance levels include the 50-day exponential moving average (50-day EMA, red wave) and the 200-day EMA (blue wave). Price declines after testing threaten to push WRX price down to the lower trendline of the descending triangle near $0.75.
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