If last month we commented that the cryptocurrency market was sinking with declines that reached 30% and 40% in Bitcoin and Ethereum after the People's Bank of China announced the ban on payments with Bitcoin in its country, thus closing the doors to millions of users in their country which caused a massive sale of these products throughout the world, in recent sessions, a new blow from the Asian giant has led to nearly $300 billion disappearing within the digital currency market.
On this occasion, in a new attempt to control the cryptocurrency market in this country, the government of Beijing has ordered bitcoin miners to close all their operations, while the People's Bank of China declared that investors in this sector favour money laundering and other illegal or criminal activities and therefore represent a serious damage to the security of the Chinese people.
In addition to the cryptocurrency market, one of the big losers from such restrictions include companies like Coinbase, which is currently trading at $222.60 per share compared to the $328 it began with on April 14 , during an unprecedented upward spiral in which Bitcoin exceeded $64,000.
If we look at the daily chart of Bitcoin, we can see how, after marking historical highs, it has experienced a strong correction. This complies with the bearish divergence that we observed in its MACD indicator, which has led it to lose around 50% of its value before currently trading in an important side range represented by the green and red stripes between the levels of $30,000 and $40,000 per Bitcoin.
During this important decline, the price has broken several important support, causing a triple cross of bearish averages which may imply a further correction in the price if the price is finally able to break down the lower band of the sideways movement and the level of $30,000.
As long as the price fails to recover in a sustained manner, the important level of coincident resistance of its average of 200 sessions and the Fibonacci retracement level at 38.2% in the $40,000 the sentiment will remain bearish, although for a greater upward momentum it is necessary that the price manages to overcome upwards the important level of support and resistance, represented in orange.
Source: Admiral Markets MetaTrader 5 . Btcusd daily chart. Data range: July 23, 2020 to June 22, 2021. Prepared on June 22, 2021 at 11:45 a.m. CEST. Please note that past returns do not guarantee future returns.
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