China cracks down on crypto mining causing BTC price to go down
- Over the weekend, China made a move to eliminate a sizable portion of BTC miners from Sichuan.
- The newest crypto crackdown already had severe consequences on BTC price, knocking it down to $32k.
- The recent series of price drops forced BTC below its 200-day moving average, damaging the trend.
China has been working hard on getting Bitcoin miners to leave its country, and the most recent effort to do this took place over this past weekend. The crackdown had greater consequences than just getting the miners out of the country, however. It also caused the BTC/USD price to drop down by as much as 18% on a weekly basis.
The price has been on a continuous drop for a week now, starting on June 16th, when it broke the support at $40,000. The coin encountered several more supports, such as the ones at $39k, $37.5k, and $35k, although all of them were broken over the past week. Right now, the support at $32.5k still seems to be holding, although the question is whether or not it will be strong enough to resist the selling pressure.
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As mentioned, China has been working on getting the miners to leave, even forcing Bitcoin mines in Sichuan to shut down over the weekend, which caused a very negative price reaction. Like Tesla, the country mentioned fears of the negative environmental impact as its main concern and reason for acting in such a drastic way.
Crypto-related firms also saw their stock price drop, including Microstrategy (MSTR) which went down by nearly 10%, Square INC. (SQ) that dropped 23%, and even Coinbase Global (COIN), which dropped 3.18%.
John Petrides of Tocqueville Asset Management said that it is important to establish the difference between coins and blockchains, and while it is easy to see the value of blockchain technology, it is difficult to determine the worth of coins or even classify them properly. He mentioned the emerging NFT sector as evidence that blockchain’s role goes beyond simple utility tokens. That way, Ethereum would have greater worth than Bitcoin.
Ari Wald of Oppenheimer joined the discussion, noting that BTC is down 50% from its April high. Given this low position, he believes that this is not the tactical time to sell. However, he also noted that BTC fell below its 200-day moving average, which is very damaging to the trend. As for his prediction for the future, he believes that BTC will spend the future period locked between a support at $31k and a resistance at $41k.