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China Vs. Bitcoin: Will We See $100,000?

By AMarkets CompanyCryptocurrencySep 30, 2021 12:38
China Vs. Bitcoin: Will We See $100,000?
By AMarkets Company   |  Sep 30, 2021 12:38
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BTC/USD keeps consolidating in a narrow range of $ 41,000 - 43,000, showing no clear intentions to interrupt the downtrend. Market participants believe that the potential for Bitcoin decline has not yet been exhausted, with the major sell-off probably recommencing in the coming days. It should be noted that the news background supports this scenario.

On September 27, large crypto exchanges halted new account registrations for users in China. In particular, the representatives of the world's leading crypto exchange Binance said that registrations using Chinese mobile phone numbers are now blocked, and the Binance mobile app is not available for download in this country. Huobi made a similar announcement. Such restrictive measures were the result of Beijing's recent crackdown on cryptocurrencies.

On September 24, the People's Bank of China declared all digital coin transactions, including trading, illegal. It also became known that the online trading company Alibaba (NYSE:BABA) intends to ban the sales of equipment, software, tutorials and all crypto-related goods and services as of October 8. Against this background, a number of large mining pools were closed in China. Thus, the largest BTC mining company F2Pool refused to service Chinese-based miners, and the second-largest mining pool ETH Sparkpool announced its plans to suspend its activity by the end of this year.

Meanwhile, the number of transactions in the Bitcoin network has been declining since May and is now at its multi-year lows. The increase in the number of transactions is usually associated with the bullish sentiment in the market as it indicates the inflow of new participants into the network. A decrease in the number of transactions, on the other hand, is a sign of decreasing interest and a drop in the number of active users. Currently, about 200 thousand transactions are processed daily, which corresponds to the levels of the 2018 bear market. The main participants in the bitcoin network are long-term holders, who don't want to sell their tokens, still expecting the long-term bullish trend to recommence with the BTC/USD potentially rising above $100,000.

The general reluctance of traders to take risks in the face of the continuing debt problems of the Chinese developer Evergrande (HK:3333) and the US potential debt default keep weighing on the entire cryptocurrency market. On Monday, the US Senate Republicans blocked a spending bill proposed by the Democrats that could provide funding for government agencies and raise the debt ceiling. The government's current funding expires on October 1. US Treasury Secretary Janet Yellen states on Tuesday that the government will not be able to meet all the nation's commitments unless they raise the borrowing limit by October 18. Most likely, Congress will reach some agreement at the very last moment. But until then, the investor panic may severely affect crypto enthusiasts. That being said, bitcoin runs the risk of sinking to $30,000 in the coming days, and only then will growth most likely resume.

China Vs. Bitcoin: Will We See $100,000?

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China Vs. Bitcoin: Will We See $100,000?

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