The price of Bitcoin suffered yet another hit after news reports coming in from China revealed that the local authorities plan to shut down Chinese Bitcoin exchanges. Only last Monday an official update from the People’s Bank of China (PBOC) hit Bitcoin’s price after it was revealed that the government will be putting a stop on ICO campaigns. Several days later, on Friday, a Bloomberg report announced yet another ban and sent the price down even further, dipping below $4,000 for the first time in weeks.
At the same time, reports came in about North Korea’s alleged plan of stealing Bitcoins through hack attacks to bypass the sanctions and isolations the country is facing. According to a CNN report, the increasing wave of sanctions is likely fueling cybercriminal activity in the country which has been no stranger to hacking in the past.
Calling upon reports from cyber-security firm Fire Eye, CNN report that there were three identified attacks on cryptocurrency exchanges in South Korea that were tied to hackers from its northern neighbor. And most indicative of the reason is the fact that activities spiked after the US announced they play to increase sanctions against North Korea.
Trading Volume down, Selling Pressure Appears
The news update about China’s ban has definitely had an impact on the price, taking it from a Friday high point of $4,660.04 to the week’s low of today when BTC price even touched $3,937.19. The price has been circulating closely to this range during the past hours.
Another thing evident in our market analysis is the drop in trading volume and market capitalization, which have dropped down close to last month’s levels. Where last week the market capitalization was at $74.3 billion it is now at $65.8 billion, while the trading volume has dropped from $2.4 billion to $1.98 billion.
Our technical analysis is showing that the price drop might not stop soon as 10 out of our 12 oscillators and all 12 moving averages are signaling a selling trend. The SMA 100 has also dropped below the SMA 200, signaling there is less resistance on the downward course.
Unless the market trends change the price will likely be headed for a further correction. So, keep your eyes close on your Bitcoins and watch out for any updates from East, as there might be other rallies prompted by the crisis in the region.
China to Shut Down Cryptocurrency Exchanges?
The Chinese government has decided to once again put a stop on domestic trading of Bitcoin and other cryptocurrencies by closing down local exchanges, Bloomberg reports. The news surfaced online on Friday when it was revealed that a new ban will be enforced that aims to stop trading through exchanges, although private over-the-counter trading is not yet to be targeted.
There is no clear explanation as to why a ban is being considered apart from speculations that it is due to a country-wide clampdown on financial risks, considering the bubble warnings so present in the past weeks, but also the prospective release of PBOC’s own digital currency. With the government tightening financial regulations on all fronts the untraditional nature of cryptocurrencies might be a big reason why they are being targeted.
According to Bloomberg, China accounts for about 23% of trading and it is the home to some of the biggest mining pools. However, as big as the country’s role is, the ban is mostly expected to slow down the trading and the development of digital currencies in China but not have a devastating effect over the price of cryptocurrencies.