Things are not looking all that great for the cryptocurrency markets right now. Yesterday’s “fake’ news regarding Chinese regulators looking to ban all exchanges has created a lot of fear among cryptocurrency holders. This has had a negative effect on virtually all currencies in the top 20. The Bitcoin price, for example, dropped by nearly 8% due to this news.
Bitcoin Price Drops on China Scare
It is not entirely surprising to see the Bitcoin price respond negatively thanks to yesterday’s China’s news. More specifically, there is still some uncertainty regarding what the regulation entails exactly. Some sources claim all exchanges will be banned from operating, whereas other news sources indicate this is just a misunderstanding based on the news regarding China’s ban on initial coin offerings. It is hard to make sense of it all, but for now, major Chinese as exchanges are still operating as normal.
Unfortunately, a lot of damage has been done in the wake of this news. The Bitcoin price took a very sharp tumble, resulting in an 8% loss over the past 24 hours. Although it is not the biggest dip we have seen in history, it also shows it only takes one [potentially fake] shred of news from Chinese regulators to send the price downward. This goes to show how many people still pay close attention to what the Chinese government aims to achieve.
With the Bitcoin price declining by 8%, the market cap has also taken a big hit. More specifically, the Bitcoin market cap hovers around the $70 5bn mark for the time being, whereas it was nearly $76bn not too long ago. Rest assured this lost value will be recovered sooner or later, though, as there is no way regulators can keep the Bitcoin price down for long periods of time. It’s also not the first time we see Chinese trying to crash the market with news that can be interpreted in many different ways.
Luckily it appears the Bitcoin trading volume is holding its own with relative ease. Although a lot of people will liquidate some of their assets in the coming days – until there is an official clarification of what is going on in China – the trading volume isn’t drying up. With 28bn in 4-hour volume, Bitcoin has had a lot of action across many different markets. In a way, it is remarkable the price is still over $4,200 right now.
Most of this trading volume originates from the Bitfinex exchange, which is not entirely surprising. OKCoin, BTCC, and Huobi are next up, and all of those platforms trade Bitcoin at a value of $3,900 and lower. It is evident there is a lot of negative market pressure in that part of the world, whereas other exchanges all trades between $4,270 and $4.385. The Asian exchanges are certainly bringing the global market average down by quite a margin. Japanese and Korean exchanges aren’t showing such a low price right now, which could be an interesting trend to keep an eye on.
All things considered, it appears as if these Chinese “scares” are having less effect every single time they occur. We have seen nearly a dozen warnings from regulators regarding cryptocurrency over the past few years Every time this happens, the price goes down for a few days before moving up again. This time, the downward momentum is far less prevalent than people would have expected. If there is any truth to this “ban” in the end, things can get very ugly very quickly, though.