Tornado Cash (TORN) has lost almost half of its stock market value two days after receiving a sanction from the US Department of the Treasury.
The department accused Tornado Cash, a cryptocurrency mixing platform, of laundering more than $7 billion in cryptocurrency, including a $455 million endowment allegedly stolen by hackers based in North Korea.
Immediate reactions were followed by US-based crypto firms including Circle and Coinbase. In a controversial move, popular cryptocurrency firms blocked the movements of their co-issued USDC stablecoin linked to blacklisted Tornado Cash smart contracts.
TORN Price Drops 45%
The news caused traders to limit their exposure to TORN, the native Tornado Cash token.
On the daily chart, the price of TORN has fallen by approximately 45% since the Department of Justice’s announcement about Tornado Cash, reaching $18.50 on August 10. Instead, the valuation of all crypto assets has plummeted just 6% in the same period of time.
Interestingly, the TORN sell-off has been accompanied by an increase in daily trading volumes, suggesting momentum.
TORN technicals suggest a recovery
The downside move has pushed TORN price close to a critical technical support.
TORN has been testing its $15-$18 range for a potential bounce due to its historical relevance as support. In particular, in January and June of this year, this level served as a springboard for the TORN price to jump 275% and 100%, respectively.
Therefore, A potential bounce move out of the range could see TORN reaching $32.50 as its next upside target, which coincides with the 0.236 Fib line as shown above. In other words, a 75% recovery by September 2022.
On the other hand, a break below the support range sends the price of TORN to new all-time lows.
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