Bitcoin Falls 21% on China ICO Ban

FXOpen

Bitcoin prices fell almost 21 percent after the People’s Bank of China banned ICOs. This was enough to end the trend on the daily charts. Litecoin, on the other hand, remains in rally mode despite suffering large losses as well.

Bitcoin Falls 21 Percent on ICO Ban

Bitcoin fell from the $4,960 high reached a few days ago to hit a low of $3,930 today. This is a drop of $1,030 or 21%. We are currently trading at $4,247 after a sizeable recovery from the lows. The main reason behind the drop was news that the PBOC banned ICOs in the country. More on this developing story HERE. To read a brief explanation on ICOs please click HERE. There are rumors that the PBOC might take further action on ‘virtual currencies’ soon.

btcusddaily-sept5-copy

The large drop effectively ended the bullish trend on the daily charts. Today looks set to close as a ‘doji’ also known as the indecision candlestick. What happens in the next few days or weeks will decide the next direction for BTC/USD. A breakout above $5,000 would restart the rally. Slightly below here we have the all-time high at $4,960 dollars per coin. This level along with the $5,000 round figure should act as a strong resistance area.

On the way down we similarly find another support area around the $4,000 round figure, stretching from $4,000 to yesterday’s low at $3,930. A new downtrend (on daily) requires a break below the $3,600 swing low. Further down we have more support at the $3,500 round figure, closely followed by the $3,491 swing high. A clearing of this area could extend the losses for bitcoin. On the weekly and monthly charts, BTC is still in an uptrend.

More Gains for Litecoin

Litecoin hit a new all-time high of $93.60 on September 2nd. Then as the China ICO ban rumors started swirling around LTC/USD fell along with the rest of the market. Today a low of $60.55 was hit, a drop of $33.05 dollars from the highs. In percentage terms, this was a move of close to 37%.

ltcusddaily-sept5-copy

However, this wasn’t enough to end the rally on the daily charts. For that to happen the bears will have to push prices below the $50 round figure. Support above here can be found at the today’s low of $60.55. This is followed by the $60 round figure and the $58.52 swing low. A clearing of this area may open the door to the $50 handle. But like we said above, the daily trend will remain up until the $50 round figure gives way. On the longer-term weekly and monthly charts, LTC remains in a bullish trend.

If you look for a platform where you can trade bitcoin, learn more about FXOpen.

FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage, 30% margin call, 0.01 lot minimum transaction size with no maximum — at your service. Open your trading account now or learn more about crypto CFD trading with FXOpen.

*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules respectively. They are not available for trading by Retail clients.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Cryptocurrencies

BTC/USD Analysis: Bulls Lose Progress Amid SEC Defeat Bitcoin Trading Volumes Fell to a Minimum of 4 Years BTC/USD Price Analysis: RSI Drops to Lowest Since March 2020 BTC/USD price analysis: The Price of Bitcoin Collapses by about 8% in One Day Market Analysis: XRP/USD Price Rolls Back to Important Support

Latest articles

Weekly Market Wrap With Gary Thomson: UK STOCK MARKET RISES, S&P 500 FALLS, OIL ANALYSIS, EUR/GBP

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. UK stock market rises

Forex Analysis

EUR/USD Analysis: Key Support Zone Resists Selling Pressure

Today, fresh monthly values of the PMI index, which is considered a leading indicator of the state of the economy, have become known: France: actual 43.6, expected 46.2. This is the worst economic contraction since the coronavirus.Germany:

Forex Analysis

USD/JPY Analysis: Rate Reaches Maximum of the Year

This morning, the Bank of Japan's decision on the interest rate, which has been kept at -0.1% since 2016, became known. The rate size remained unchanged. Although surprises could occur due to the fact that inflation is still above

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.