Summary:
- Bitcoin (BITCOIN on xStation5) plunges below a $12k mark as South Korea warns that a crackdown on trading still possible
- China escalates further its clampdown on digital currency trading
- French finance minister calls for tough new regulations on virtual currencies
Bitcoin took a hit over the course of the past hours as risks related to the South Korean thread came back again. To be precise, according to the country’s finance minister Kim Dong-yeon who appeared in an interview with local radio overnight prohibition of trading in digital currencies is “a live option” but the decision is subject to a thorough government review. As a result the most famous digital currency tumbled over 15% making its bottom below $11,600. Do notice that the knee-jerk move has managed to break through a relevant support zone which if sustained could lead to a more severe sell-off going forward.
Bitcoin is set to break below its pivotal support area which could pave the way for further falls. Source: xStation5
From a technical point of view one may notice that we have already found ourselves at a key point which could provide fuel for subsequent declines. First and foremost the Bitcoin price has smashed a lower boundary of a triangle formation nearing a lower limit of a descending channel at the same time. Once those moves are sustained it could give a rise to a much deeper slide even toward $8,000 where one may find a more notable support. What’s more, the broken support zone coincides with a 50% retracement of the latest leg higher therefore its relevance might be yet greater.
Chinese authorities add to Bitcoin’s slump
Looking back to the past one may argue that the worst reports for Bitcoin have come from Asian of late. The first blow was dealt from South Korea and the second one came from China. While the local authorities banned domestic cryptocurrency exchanges in 2017 they have noted recently a rise in activity on alternative venues. Therefore they plan escalating its clampdown on digital currency trading focusing on trading online platforms and mobile apps offering exchange-like services. Revelations from people familiar with the matter have also pointed that the Chinese watchdog will also target individuals and companies which provide market-making settlement and clearing services for centralized trading. It coincides with the latest reports that China could discourage Bitcoin miners from their activity in a bid to save electricity. On the flip side it needs to be aware that Chinese Bitcoin miners are expected be profitable even as the Bitcoin price slumps vastly below $10,000. Either way, China should be satisfied with the declining cryptocurrency price.
French finance ministry calls for new cryptocurrency regulations
The French finance ministry seems to not be a supporter of digital currencies as it has called for tough new regulations on cryptocurrencies in order to stop them being used to dodge tax or finance terrorism and other crimes. Finance minister Le Maire has ordered a former central bank chief to draft potential new rules suggesting that virtual currencies might be used in speculation and financial manipulation.