Once again, the price of Bitcoin suffered a correction during the weekend, falling down from its $17,000 range back to $13,500. Whereas last week a bullish sentiment on the trading market started to drive the price back on the road to recovery, this weekend brought a shift in trading trends that turned the market bearish, causing the price to drop.
In other interesting news, a US cyber-security firm called AlienVault discovered a malware that mines cryptocurrencies and sends them back to North Korea. Namely, as CNBC report, the malware was found to infect victim’s computers and use them for mining the Monero cryptocurrency and send it back to the Kim IL Sung University in Pyongyang.
Only recently, the Pyongyang University had invited experts from abroad to lecture on cryptocurrencies. The security firm who found the malware says that the virus might be the latest product from the university’s endeavors but that it could also be possible that the North Korean server used in the scam was just a “trick” devised to misguide security investigators who spotted the malware.
Sellers Take the Lead
Since our update last week, the price of Bitcoin broke out of its $15K range driven by a strong buying wave and reached a peak of $17,712.40 on Sunday evening. But a change in market sentiment began to drive the price downwards not long after its peak, even taking it down to as low as $13,881.80 this early morning.
During this time, the trading volume grew significantly from Thursday to Saturday, hitting $23 billion during the price peak and marking a bigger interest in trading during the weekend. As of now, the volume sits at $16.7 billion while the market cap is at $236 billion.
Our technical analysis shows that the market is strongly pro-sell, with 9 out of 12 oscillators and all 12 moving averages being down to indicate a selling trend. However, the SMA 100 is still over the SMA 200, showing there’s less resistance to the upward course, while the Stochastic is also signaling a possible return of buyers.
Overall, the current market signals suggest the sell-off will continue. If the trends don’t change and the price breaks past the $13,100 bottom, it could continue rolling down further.
China Plans “Orderly Exit” from Bitcoin Mining
One notable reason for the sudden shift in market trends this weekend were the uncertain online reports coming in from China. The reports first warned about the central bank and local government restricting power to local mining operations before a clarification was posted that spoke of a plan for an “orderly exit” of the country from mining.
According to Quartz, two leaked documents from China’s internet finance regulator – The Leading Group of Internet Financial Risks Remediation – verified this later claim and showed that the local watchdog has issued a nation-wide request to local offices, asking them to help guide local mining operations to quit the business. The measures prescribed to local offices of the regulator for guiding the businesses are said to be taxes, environmental protection measures, electricity price, etc.
According to reports, the main concern for the Chinese authorities is the energy consumption and “speculation” that Chinese mining operations have contributed to. Progress on the exits of local miners are expected to be reported back on the 10th of each month, but local sources are unconvinced on how effective this measure will be, considering the difficulty of locating smaller mining pools and the potential losses to the local economy, should larger mining pools cease to operate.