Bitcoin has taken a major body blow after the latest Chinese crypto crackdown was announced this morning.
Volatility and Bitcoin: name a more iconic duo.
With the token starting the day in the green, traders were hoping to see a reversal to the bearish patterns and price action seen in September so far.
A fresh ruling from the People’s Bank of China put paid to that.
China’s central bank has said that all cryptocurrency transactions in the country are illegal and must be banned. As anti-crypto signals go, they don’t come much tougher than that.
A statement by the POBC said that all cryptocurrencies, including Bitcoin, Tether and Ether, are not fiat currency, thus they should not be circulated on the market.
The ban includes services provided by offshore and international exchanges to domestic Chinese citizens.
China’s crackdown on digital currencies has been rumbling along across the year, but this is the most overt statement yet.
The nation already moved to ban crypto mining earlier in the year. China’s economic planning agency said efforts to completely root mining out are underway, which could pose big problems for the global BTC supply.
Additionally, the POBC is stepping up its monitoring of cryptocurrency transactions, including speculative investing.
“Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the bank said
Bitcoin, as well as other tokens such as Ethereum, have been sent reeling by this news. Associated stocks such as Coinbase and MicroStrategy have also begun to slide on the PBOC’s comments.
BTC had been trading over $45,000 prior to the bank’s proclamation. At the time of writing, it had lost 5% as it spirals back into the red. Bitcoin is now being traded for around $42,500 but will likely slide further as the day progresses.
Some analysts were expecting higher prices towards the weekend with talk of $47,000. Now, it looks like BTC is going to continue to trend downwards into next week.
Looking at crypto boards just shows red. Ethereum is down nearly 10% and so is Litecoin. Polkadot has dropped over 11% while Ripple has also dropped by 8%.
Consternation over another market drop has never been far away from the Bitcoin sector after it tumbled from all-time highs of over $65,000 earlier in the year.
Arcane’s Fear & Greed index, which measures general market attitudes regarding BTC performance, was flashing bearish signals at the start of the week and this has continued.
On a scale of 0-100, with 0 being extreme fear and 100 being extreme greed, BTC registered a 27 rating on Tuesday, suggesting fears the market may bottom out are coming to fruition.
Realistically, this move should have probably been spotted earlier. As mentioned above, China has not exactly been subtle in its government-led distaste for decentralised finance. This is a nation where pretty much everything passes through government control after all.
But just when things were looking good for BTC, it’s down once more. It only goes to show just how volatile cryptocurrency trading is and how susceptible the market is to external pressures.
Perhaps wider global regulation may cause stabilisation across the board, but for now, cryptocurrencies are probably going to continue to pitch on volatile seas.
Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
The U.S. JOLTs job openings for May stood at 7.769 million, with June’s figure (due 29 July, 1400 GMT) expected to fall to 7.1 million, signalling a cooling labour market under tight Fed policy.
Following the ECB's decision to hold interest rates steady, Goldman Sachs and JPMorgan Chase revised their expectations for future rate cuts, considering the economic resilience and potential developments in EU-US trade relations.
As U.S. stock markets soar to record highs, firms like Goldman Sachs and Citadel are advising clients to buy relatively inexpensive hedges to protect against potential losses due to a confluence of risks.
set cookie
