Over the last few weeks, a lot has happened in the crypto space and all does not seem to be well anymore for many. Usually, the word 'dip' refers to a slight retracement in price before the continuation of a trend, however, what we've seen so far on several crypto charts suggest otherwise. In this article, we examine the grounds for the resurrection of three of the mainstream cryptocurrencies
Crytpo Becomes Illegal in China
2021-09-24 • Updated
It’s unbelievable but China’s government prohibited all transactions with cryptocurrencies (yes, even Bitcoin) and promised to stop illegal crypto mining. While the rest of the world is taking steps to include crypto into the economy, China denies it.
What does China mean for crypto?
China is home to a huge part of the world’s crypto miners. As we know, mining requires a lot of energy resources and it prevents China from curbing greenhouse-gas emissions. Bloomberg says 46% of the global hash rate (computing power used in mining) occurred in China in April.
What will be the circumstances?
It is a negative factor for the whole crypto market in the short term. Today, BTC/USD has dropped by 3168 points in one day. The downtrend is likely to stay with us for longer. So good that FBS traders can open both buy and sell trades. Besides, it can be also a negative factor for chip producers such as Nvidia and AMD as demand for GPUs is going to drop in China and press the prices of GPUs down.
Bitcoin has dropped to the support level of $41,000, which lies at the 50-day moving average and the 50% Fibonacci level. It makes this level a strong barrier, which the cryptocurrency will struggle to break on the first try. If it manages to cross, BTC/USD will plunge to the 61.8% Fibo level of $38,000. Resistance levels are $44,000 and $45,500 (the 200-day moving average).
Bitcoin could be a potential haven for Russian oligarchs seeking to avoid sanctions, as there will be no censorship on the Bitcoin network and cryptocurrency transactions. Russians may have trouble converting their money back to fiat, yet the cryptos could act as a robust store of value for a significant part of holdings that do not need to be liquid.
First, "ETH merge" Google requests are on the rise. At the same time, "buy ETH" requests are at their two-year lows, which is quite a negative factor ahead of the vast update. The community either doesn’t believe in the success, or they are following the "buy the rumors – sell the news" rule and waiting for the massive dump after the merge.
Let's start off with a look at the Daily timeframe on Bitcoin. We currently see price reacting to the rally-base-rally demand zone between the 15,600 - 14,300 price area. Price also seems to have found support off the trendline support as marked in the image above. Interestingly, this means the overall bias on BTCUSD is Bullish.
Central Bank Digital Currencies (CBDCs) are virtual national money. The idea of creating such currencies came to the authorities after the success of cryptocurrencies, which also exist only in digital form.
The views here are solely based on Technical Analysis techniques using my personal Smart Money approach. Hence, it is important to understand that the trading of CFDs comes at a risk; if not properly managed, you may lose all of your trading capital. To avoid costly mistakes while you look to trade these opportunities, be sure to do your own due diligence and manage your risk appropriately.