Well it’s safe to say that the next 24-hours are going to be incredibly rough for the crypto world as China just announced a complete ban on cryptocurrency trading. The news was reported less than an hour ago in the South China Morning Post.
“China is to block all websites related to cryptocurrency trading and initial coin offerings (ICOs) – including foreign platforms – in a bid to finally quash the market completely.” (Source – South China Morning Post)
What this means for the already battered crypto markets one can only guess but with Bitcoin struggling to stay above $8,000 I think it’s safe to say we’re going to see it get quite a bit lower this week. This is also one of those times where everyone trying to do technical analysis is going to have a pretty hard time since technical analysis was really meant for markets that follow some set of rules.
Imagine trying to apply technical analysis to a stock if suddenly the US stopped allowing people to buy stocks…it just wouldn’t work. This is why I definitely think that reading articles about where Bitcoin’s “critical supports” are or about which Fibonacci line makes sense now really is just a bunch of BS.
The reality is, this news is going to scare the crap out of investors/speculators and the market is going to likely tank. As someone that’s in this for the long haul I expect a lot more bad news like this to come over the years, along with a lot of good news and adoption by large platforms like Fidelity and eTrade…but I’m getting ahead of myself, that probably won’t happen for a while.
Now you might have thought that China already banned crypto but that wasn’t quite the case, although they did make a major move in that direction way back in September.
Officially, the ban on big cryptocurrency exchanges and ICOs implemented in September 2017 has been effective in mitigating potential financial and social risks. According to the report, the amount of cryptocurrency trading in RMB made up 90% of the total volume of global transactions but the number is now down to 1%. Unofficially, however, many Chinese citizens have been trading through platforms outside of China by using online circumvention tools. Currently, Japan and Hong Kong are the most popular places to trade cryptocurrency for Chinese citizens. (Source – TechNode)
As I’ve said many times in past articles but never hurts to say again, I’m a long-term speculator in crypto so the positions I have now I’m holding for the next five years, I think any short-term trading moves is truly high stakes gambling. That being said I do sometimes buy more on the dips but this is one of those dips that I won’t be buying into right away. Once the carnage is over I think there will be a great buying opportunity, but for now, it’s limbo time which means it’s time to see how low can it go.
I honestly wouldn’t be surprised to see Bitcoin at $5k or lower, but five years from now I wouldn’t be surprised to see it north of $50k. What do you think? Comment and let your voice be heard!