Current situation:
At the beginning of September, Chinese authorities issued a ban on ICOs. This was the beginning of the storm. Bitcoin’s first drop of 21% was halted by buyers at 3,900 USD. The regulator then started hinting at unlicensed exchanges to start closing down voluntarily. The psychological barrier of 4,000 USD couldn’t resist the second wave of bitcoin sales. After breaking through this level, the storm became a hurricane. Over the course of the last two and a half days, the price has collapsed by 24%. So, since the start of this period, the bitcoin has fallen by 39%, from a high of 4,970 USD all the way down to 3,024 USD.
The National Internet Finance Association of China (NIFA), founded by the People’s Bank of China, released a notice labelling bitcoin as a speculative instrument used for illegal fundraising and money laundering. Of cryptocurrency exchanges, they said that they’re platforms that lie outside of China’s legal framework.
China’s official ministry for finance regulation has demanded all cryptocurrency exchanges (including OKCoin and Huobi) to make a decision and choose a date for halting their trading operations by the end of the next day. The ViaBTC exchange has announced that it will cease operations on September 30, 2017. The exchange is expected to block funds withdrawals within the next two weeks.
Technical analysis:
Now let’s see what technical analysis has to tell us. I warn you now that TA doesn’t work against the fundamental signals created by the Chinese regulator. My markings show price levels, from which we could see an upwards reversal. Don’t be fazed by the large number of lines and labels. This is my road map, all lines are important.
Labels on the chart:
- TR – trend line from the 888 USD base (23/03/17)
- TR1 – trend line from the 3,003 USD top (11/06/17)
- TR3 – line of the C-C channel
- A-A – upwards channel projected from the 1826 base (16/07/17)
- B-B – downwards channel, projected from the 4970 top (02/09/17)
- C-C – upwards channel projected from the 2690 (25/05/17) and 4970 (02/09/17) tops. A copy of the line has been imposed on the 1826 base (16/07/17).
