Bitcoin fluctuates as Chinese regulators punish companies for cryptocurrency

Bitcoin fluctuated Tuesday after China’s central bank and a regulator in the capital took action against a company that allegedly provides cryptocurrency-related services.

The largest cryptocurrency was up 3.7% to $ 35,094 before falling back after the People’s Bank of China and Beijing’s local financial regulator ordered a company in the city to cancel its business registration. As of 7:55 a.m., it was trading 1% higher at $ 34,194 in New York.

Financial and payment institutions should not offer virtual currency-related services, directly or indirectly, the PBOC and the Beijing regulator said in a statement. It named marketing, advertising, and display, as well as location tracking among prohibited activities.

“While it doesn’t directly affect crypto, China’s crackdown on tech companies is another example of how it is flexing its regulatory muscles against an industry that is lacking oversight,” said Antoni Trenchev, co-founder of crypto lender Nexo in London. “Bitcoin is also caught in China’s regulatory crossfire as it is seen as a threat to the digital yuan.”

China has increased its focus on the cryptocurrency industry by adding restrictions on mining, trading and other services and issuing warnings to companies like banks that could facilitate such transactions. Many miners have closed or are trying to leave the country and mining metrics have shown decreased activity.

The move came after some chart watchers viewed the 50-day moving average above $ 36,000 as a potential zone for a bullish breakout. However, Bitcoin remains stuck in a range of around $ 30,000 to $ 40,000 for weeks after falling from its mid-April high of $ 65,000.

“Bitcoin has been trending sideways between $ 30,000 and $ 40,000 for seven weeks,” said Trenchev. “I expect Bitcoin to remain stuck in this trend for the foreseeable future before it grinds higher again.”

Read more: China calls top banks for meeting to reinforce crypto ban

–With support from Ocean Hou and Yujing Liu.

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