- China is expected to stop exchange trading of cryptocurrencies this month
- Bitcoin (BTCUSD on xStation5) nears a critical level as week is set to end
- Chinese clampdown on digital currencies hits the shares of related companies
- Litecoin (LTCUSD) crashes along with Bitcoin
This week is likely to be the worst for Bitcoin since January 2015. The sell-off gathered momentum on Monday and deepened afterwards. China has been decisively the largest accomplice of that rout. What’s more, the country aims to stop exchange trading of cryptocurrencies by the end of September, according to people familiar with the matter. The latest revelations said that Regional Chinese regulators were notified of the plan by a central bank-led group overseeing Internet finance risks. In effect, Bitcoin has tumbled 28% this week and other virtual currencies have been affected as well.
Having looked at the chart above one could be astounded what has happened with the Bitcoin price since the beginning of the week. After the several weeks of wild increases, the uptrend has been brutally halted. From a technical point of view, the price is nearing a pivotal support on a weekly interval. Taking into account that the week is set to end before long, we could assume that a bounce could be possible in the following week if buyers are able to hold the price above $3000.
Admittedly, $3000 plays a significant role from the psychological point of view, the ongoing move might slightly deepen just under $2900 where the most recent leg up began. What’s more, according to Chris Weston, IG’s chief market strategist in Melbourne, $2877 is a “key line in the sand” and “the bulls will want to see this hold.”
Even as major focus is on Bitocoin and other virtual currencies, it’s worth mentioning that the Chinese crackdown has taken its toll elsewhere too. For instance, Hong Kong-listed PC Partner, which makes graphics cards used in Bitcoin mining, has tumbled 27 percent since China’s central bank declared initial coin offerings illegal earlier this month.