The People’s Bank of China has deemed all cryptocurrency trading activities illegal.
Bitcoin and Ethereum fell in tandem, losing more than 6% in market value.
If the bearish momentum accelerates, BTC could target $36,000 and ETH $2,400.
Share this article
Another Chinese cryptocurrency ban has hit the market hard, pushing Bitcoin and Ethereum toward critical support levels. Now, investors must remain vigilant as further selling pressure could lead to more considerable losses.
PBOC Cracks Down on Crypto
The People’s Bank of China (PBOC) announced that it would be taking further measures to crack down on cryptocurrencies.
In a public statement, the PBOC said that digital assets had disrupted economic and financial order, increasing illegal and criminal activities in the nation. To prevent further propagation of these risks, the Chinese central bank deemed all services enabling the exchange of fiat currencies and cryptocurrencies as illegal activities.
The new regulation targets any financial institution or trading platform that allows Chinese citizens and residents to convert yuan into cryptocurrencies. Additionally, individuals who engage in such activities and crypto derivatives trading would be subject to legal prosecution.
PBOC’s recent remarks have shaken the entire cryptocurrency market. In particular, Bitcoin and Ethereum plummeted by more than 6%, losing most of their recent gains. Now, these digital assets stand on shaky ground and may be prone to further losses.
Bitcoin and Ethereum On Thin Ice
From a technical perspective, it appears like the Tom DeMark (TD) Sequential indicator sensed that a steep retracement was underway. This technical index presented a sell signal in the form of a green nine candlestick on Bitcoin’s 4-hour chart, anticipating a one to four candlesticks correction.
Now that the pullback is underway, only one support barrier might keep falling prices at bay. The 78.6% Fibonacci retracement level and the setup trendline are acting as an essential interest zone. These demand walls sit at $42,450 and $41,900.
Bitcoin must hold above this support area to continue to trend upwards. Failing to do so could accelerate the selling pressure behind it, pushing prices to $39,600 or even $36,000.
The TD setup also turned bearish as Ethereum rose to $3,200. The PBOC’s statement might have helped validate the pessimistic outlook, pushing ETH back to $2,900. Now, the bulls must do everything in their power to prevent Ethereum from slicing through this support level.
Further selling pressure that breaks the $2,900 support can result in significant losses as the next critical interest areas are $2,650 and $2,400.
Investors must pay close attention to the support levels that Bitcoin and Ethereum currently hold to determine where these cryptocurrencies are heading next. Although the market might have reacted quickly to PBOC’s statement, many Chinese investors might be forced to sell their holdings to avoid legal issues.
This news was brought to you by Phemex, our preferred Derivatives Partner.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.