Bitcoin Tumbles $10K, As China Continues the Crackdown on Mining and Trading

It seems like the situation has reversed for cryptocurrencies, they were extremely bullish this year and the trend only kept picking up pace. In May, certain cryptos like Ethereum were surging even stronger, while the rest of the market including Bitcoin was trading sideways.

That was a sign of weakness and uncertainty, and yesterday we saw a big retreat which was due after a one year rally. Elon Musk’s comment saying that Bitcoin is overvalued ignited the rout at first then China added further pressure to the decline.

What Did China Announce?

China has barred financial institutions and payment companies from providing any services related to cryptocurrency transactions. This means that banks and online payments channels must not offer clients any service involving cryptocurrency, such as registration, trading, clearing and settlement. China had issued such a ban in 2017 as well, but compared with the previous ban, the new rules have expanded the scope of prohibited services, and surmise that “virtual currencies are not supported by any real value”.

Today Vice Premier Liu He said China will crack down on bitcoin mining and trading. This lands in a vulnerable market at the moment and 65% of mining is done in China, so it is weighing on cryptocurrencies again now.

Bitcoin Live Chart

BITCOIN climbed above $40,000 yesterday, after it had fallen to $30,000 during this week’s crash. But today was no follow through, which was a bearish signal and now it has turned down again, losing around $10,000 after comments from the Chinese premier. The decline has stopped for now, so let’s see if cryptocurrencies will reverse higher again soon.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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