More crypto pain coming from China this week. After the ICO and ICO exchanges ban announced last week, authorities could be banning bitcoin exchanges as well. Prices understandably crashed on the news, hitting a low of $3,969 on FXOpen before rebounding.
China Moving to Ban Crypto Exchanges
According to two major financial publications, Chinese authorities are drafting regulations that will ban all crypto exchanges from operating in the country. The news first broke on Friday in Caixin, a Chinese finance publication. On Monday a similar report was published in the Wall Street Journal. According to the articles, it appears that Chinese regulators plan to ban all crypto exchanges from operating in the country. Over the counter (OTC) trading as well as in-person trading would be tolerated.
The news crashed bitcoin prices to a low of $3,969 on FXOpen, with similar lows around the $4,000 level hit on most Western exchanges. Chinese sites traded to a low near the 20,000 Yuan mark ($3,100) before rebounding strongly. They are quoted at 26,800 CNY right now, or around $4,123 dollars per coin. Bitcoin is trading at $4,327 on FXOpen.
If the reports are indeed true, why are prices rebounding strongly? There is disbelief in the crypto community about the validity of the ban, with many calling it FUD (fear, uncertainty, doubt) or fake news. However, it seems unlikely that Chinese regulators would remain silent for days if they weren’t the ones who initially leaked the news to reporters.
The most likely scenario is that a ban on crypto exchanges will be announced in China soon. What’s not so obvious is where prices will trade after the initial decline. Technically, the important levels to remember are $3,930 and $5,000. A breakdown below $3,930 could start a new downtrend in prices, while a move above $5,000 would restart the rally. On the weekly and monthly charts, BTC/USD remains in an uptrend.
Litecoin Rally Slows Down
The rally in LTC prices hasn’t died yet but it has slowed down considerably. We are currently quoted at $70.85 dollars per coin, up from $69.08 last week. In percentage terms, this is only 2.6%.
The bullish trend will remain in place until we get a decisive break below the $60.55 swing low. Due to the proximity of the $60 round figure, players that want to stay in a bit longer may use that level as exit instead. It should provide some support to falling prices. Similarly to BTC, on the weekly and monthly charts, LTC/USD is still looking bullish.
Open a Crypto account with one of the main bitcoin forex brokers.
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.