The question that everyone is asking themselves at the moment is: why is the price of bitcoin falling?
Some hypotheses suggest that one of the main causes could be China’s renewed hostile attitude towards cryptocurrencies.
Today, for example, a new regulatory update has been published on the official website of the Chinese Central Bank (PBoC), according to which, regulation and control over cryptocurrencies may be tightened in the future, confirming that the ban on trading is still in place.
The update also states that any activities deemed illegal in the country in this area will be immediately stopped. What China would like is for blockchain technology and cryptocurrencies not to be mixed, although this wish is most likely bound to be unfulfilled.
According to financial analyst Federico Izzi, crypto trading expert, the Chinese situation is having an impact, but it is not the only reason.
“With the official customs clearance of the word Blockchain by the Chinese government, at the end of October in 48 hours Bitcoin recorded a bullish movement of more than 40%, among the best for daily intensity of its history. A few hours later began a slow and long agony, characterised by a lack of volumes, that until yesterday have accompanied prices to new lows, cancelling much of the rise accumulated in the famous 48 hours”.
Izzi points out that, as often happens in already precarious conditions, it took only a flutter of wings to bring down the already fragile supports.
“For me, the current downturn is due to a lack of purchases already evident in recent weeks. The breaking of the supports between 8,000 and 7,500 dollars has triggered the coverage of the bullish positions of those who had bet on the words of confidence of Xi Jinping at the end of October, now become even more ambiguous. Prices are in contact with the major support of $7,000 which, if violated in the coming days, would further widen the bearish scope. The history of recent years teaches us that China’s decisions have had an impact on prices, both upward and downward, for the shelf-life of a yoghurt”.
According to a trader, of PDC Academy – Trading, already in the previous days it was possible to see a lack of desire on the part of buyers to confirm the support zone of $ 7,400.
“We have also addressed this dynamic within our own personal community, advising people to remain FLAT or bearish ever since the break-up of $9,000 or so, with the first zone of attention between $7,300 and $7,100.
The trader points out that currently a weekly confirmation of the movement is expected, but everything seems to herald a major turnaround in the medium term, leading the price to test the $6,000 zone.
“If the weekly price closes below the weekly low of $7,444 (Binance value) first, and then below the area of buyer demand dominance (around $6,900), we will be in a position to consider the downturn of the asset for this winter period (a bit like the previous year. This is a good indication of the seasonality of the asset”.
According to the expert, news from China may not have had particular relevance, since in reality they have been accompanied by some other important news of opposite sign, or potentially positive for the industry, therefore the recommendation is to take the news from the crypto market with a grain of salt.