TORN Price Prediction: Can it Rebound After Losing Almost Half its Market Valuation?

Key Insights:

• The token is down over 5% in the last 24 hours and has dropped 36% in the last 30 days. 
• The U.S. Treasury Department has blacklisted Tornado Cash and banned all Americans from using the crypto mixing service.
• TORN can possibly fall to $12 by September 2022. 

The native token of the decentralised crypto mixing service Tornado Cash (TORN) has lost almost half its market valuation after news surfaced that the U.S. Treasury Department has barred its use by American citizens as a matter of national security.

The cryptocurrency subsequently plunged 45% on August 10 which pushed TORN’s price near critical technical support.

OFAC Sanctions

As a virtual currency mixer used to obfuscate transactions, Tornado Cash has been at the centre of controversy after being linked to a string of decentralised finance (DeFi) exploits, including a $375 million attack on Wormhole and a $100 million hack on Horizon Bridge.

This is in addition to the U.S. Treasury Department alleging that individuals and groups have used the mixer to launder more than $7 billion worth of crypto since 2019, including North Korean hacking collective Lazarus Group which was linked to the $625 million hack of Axie Infinity’s Ronin Network.

However, what has sent TORN’s price crashing this week is news that more than 40 cryptocurrency addresses allegedly connected to the controversial mixer has been added to the Specially Designated Nationals and Blocked Persons (SDN) list of the Office of Foreign Asset Control (OFAC). On August 8, when the blanket ban was issued, TORN tanked to $16.29 from the $30 level just a day earlier — a price level it had not seen since June 18.

 

While the token is 97% below its all-time high (ATH) price of $437.41 recorded on February 13, 2021, TORN had been on a steady incline after closing June at $25 and rallying to the $30 price level by August 7. This is after wiping off more than half of its value during the crypto market crash when it went from $54.62 on May 6 to $26.68 by the end of the same month.

Circle has already taken steps to freeze over 75,000 USDC worth of funds linked to the 44 Tornado Cash addresses sanctioned by OFAC and a potentially influential factor on TORN’s price would be how other companies act in light of Circle’s move and whether they decide to mirror such measures.

TORN is down 5.27% in the last 24 hours and has been testing the $15-18 level for a potential rebound due to this range acting as historical support. The token is currently trading at $17.21 and a potential move upward could see TORN testing $32 which would amount to a 75% recovery by September this year. However, a break below this level could send TORN’s price to new lows.

The token currently ranks 654th in the list of cryptocurrencies worldwide by market capitalisation at $19 million.

 

Technical Indicators