Bitcoin remains with losses of more than -4% during the session, the cryptocurrency with the highest level of capitalization, tries to curb losses after closing the day on Monday, with a depreciation of -10.97%, returning to low levels of June 8.
Concerns about the current pressure from regulators mainly from China, have fueled a new wave of sales in Bitcoin, weighing on other cryptocurrencies which, similarly, had losses of more than -7% on Monday.
The declines came after the Agricultural Bank of China, which is one of the Asian country’s largest banks, said it was following the guidance of the People’s Bank of China and would conduct due diligence with customers to eradicate illegal activities involving crypto mining and transactions.
China’s central bank said on Monday it had recently summoned some banks and payment companies highlighting the involvement of state-owned lenders Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (AgBank) and Postal Savings Bank of China, as well as payments giant Alipay, which pledged to set up a regulatory monitoring system targeting key websites and accounts to detect illegal transactions related to crypto, causing investor jitters.
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Another catalyst that weighed on bitcoin’s downfall was the Chinese government’s reiteration to step up its crackdown on cryptocurrency mining by ordering the closure of 26 alleged cryptocurrency mining projects in Sichuan, the Sichuan Provincial Reform and Development Commission and the Sichuan Energy Bureau issued a notice on Friday, ordering local power companies to “review, clean up and end” mining operations on Sunday.
Moreover, bitcoin’s offering can also be attributed to the expiration of futures and options contracts with an end date of June 25.
Rafael Q. Financial Analyst of TeleTrade, considers that, the fears generated by the negative catalysts of recent weeks have frightened new investors, generating the level of commercialization to minimum levels of 5 months, but, the purchases of the financial whales have prevented a further decrease in the price.
MicroStrategy, the largest holder of Bitcoins, has made a new purchase for 489 million dollars, making clear its position, that the current offer will not last for long and that they will seek to take advantage of the future upward momentum, again reaching the levels of historical highs above 64 thousand dollars.
TeleTrade considers that, for the time being, the price of Bitcoin keeps bouncing off the June low support at 31,547 buy signals may be presented before the formation of a bullish divergence in the RSI on a D1 chart and the formation of a change of direction pattern, which may propel Bitcoin to resistance at 36,261.
The selling signals can be reinforced after the famous pattern of the death crossing, which is when the 50-period Moving Average crosses in decline to the long-term 200-period, therefore, it is necessary to be attentive to the psychological level of 31.547, which will be key to define the trend in the coming sessions.
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Rafael Quintana Martinez
Financial Analyst at Teletrade Mexico
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