(Bloomberg) – Bitcoin fell over the weekend amid a focus on Chinese mine closures and potential regulatory scrutiny.
The largest cryptocurrency fell 5.5% to $ 34,142 at 10:50 a.m. on Sunday in New York, falling for the fourth time in the last five sessions. Ether, the second largest, was down 5.9% to $ 2,095.
The hash rate in China drops significantly as bitcoin mines close, wrote Jonathan Cheesman, head of off-market and institutional sales of the FTX crypto derivatives exchange, in an email on Saturday, citing Twitter reports from handle @bigmagicdao.
“In the longer term, most view the hashrate exodus from China as positive, but could have led to inventory sales in the short term,” said Cheesman.
Cheesman also mentioned the Death Cross, which occurs when the 50-day moving average falls below the 200-day average, but noted that “backtesting is not statistically significant” for the signal for Bitcoin. For example, when the mint saw a death cross in March 2020, that was the start of a year-long rally.
Cryptocurrencies have been going through a lull recently. Bitcoin is trading at roughly half of its record high of nearly $ 65,000, which it hit in mid-April. The market value of all cryptocurrencies is around $ 1.45 trillion as measured by CoinGecko, up from a high of around $ 2.6 trillion last month.
One of the factors mentioned was concerns that China is curtailing mining due to concerns about energy consumption and following fatal coal accidents.
The city of Ya’an in the southwestern Sichuan region has promised provincial authorities to eradicate all bitcoin and ether mining operations within a year, said a person familiar with the situation. The closure of many bitcoin mines in the province has shut down more than 90% of China’s bitcoin mining capacity, according to a report by the Communist Party-backed Global Times.
According to an estimate by the University of Cambridge, around 65% of global bitcoin mining took place in China in April 2020.
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In addition, Edward Moya, chief market analyst at Oanda Corp., said that Bitcoin was put under pressure by the sudden drop in the Titan token to almost zero – a stablecoin that even attracted billionaire Mark Cuban. Regulators had already raised concerns about stablecoins, and Cuban itself encouraged further regulation of the room after the episode.
“Bitcoin crashed as the sinking of the Titan token increased pressure from regulators to provide more protection for the public,” Moya said in an email on Friday. “Titan’s crypto crash came as a surprise to many as it is a partially secured stablecoin. Given the low risk environment that hits Wall Street, cryptocurrencies are under pressure. “
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