TORN’s price dips by 45% in two days after United State’s ban on Tornado Cash

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.