It looks like the gloves are off as TORN, the native token of crypto privacy platform, Tornado Cash, is down approximately 45%, which is almost half its market valuation, in just two days after being slapped with sanctions by the U.S. Treasury Department.
To recall, the department accused Tornado Cash, a crypto privacy platform, of laundering more than $7 billion in cryptocurrencies, including a stash of $455 million allegedly stolen by North Korea-based hackers.
So far, immediate reactions were followed by US-based crypto companies, Circle and Coinbase. In a controversial move, the popular crypto firms blocked the movements of their jointly-issued stablecoin USDC tied to Tornado Cash’s blacklisted smart contracts.
What you should know
- As you would expect, the move has prompted traders to limit their exposure to TORN. On the daily chart, TORN’s price has slipped by approximately 45% since the Justice Department’s notice about Tornado Cash, to reach $18.80 as of the time of this writing.
- By contrast, the valuation of all the crypto assets has rallied over 3% in the same timeframe as the entire crypto market capitalization currently stands at $1.14 trillion. Interestingly, TORN’s selloff accompanied a spike in daily trading volumes, suggesting momentum.
- The downside move has pushed TORN price near critical technical support. Being that the native token has been testing its $15-$18 range for a potential rebound due to its historical relevance as support, players are expecting a significant rally after this decline.
- To recall based on past price action, in January and June earlier this year, this level served as a springboard for TORN price to jump 275% and 100%, respectively.
Therefore, a potential rebound move from the range could have TORN test $32.50 resistance zone as its next upside target. In other words, a 75% recovery is expected by September 2022. This seems very possible as the market has reacted positively to the latest CPI inflation which stands at 8.5% below the expected 8.7%. On the other hand, a breakdown below the support range sends TORN’s price to new record lows.