One of the things that surprised me when I started to get interested in crypto was the Chinese government's moderate approach to crypto. Because although trade and politics are intertwined in eastern countries, traders have limited power. However, in western countries, capital owners dominate the state in many issues.
In this respect, cryptocurrencies are not tools that violent states would like. Because the state can easily block a citizen's money in any bank for a legal reason, but the same is not true for cryptocurrencies. As far as I can perceive, the sensitivity of the US government is more about income taxation and investor protection. Although there are still gray issues, the USA and many European states have legalized crypto in a sense by taxing it.
If we go back to China; The communist party must have a problem with controlling the rising Chinese bourgeoisie. And cryptocurrencies are extremely powerful tools that can be used on the path to financial freedom. As such, the measures taken by China to restrict cryptocurrencies seem reasonable. China banned Bitcoin mining activities in the country in May, citing excessive energy consumption.
Today, Chinese public institutions have declared all transactions with crypto illegal. In addition, it was announced that a permanent structure will be established for the coordinated implementation of the measures taken against crypto. Upon hearing these news, Bitcoin lost 8% of its value and fell to $ 41,000. Other cryptocurrencies also lost value in parallel with Bitcoin.
In fact, China's stance towards crypto was known to the market. In this regard, this statement can be considered as a declaration of the known.
The impact of such news is greater as there is a weakness in technical indicators in the crypto market.
Bitcoin's third Fibonacci retracement is likely to drop to $37,500 as a result of a 61.8% pullback. During this retracement, serious depreciation will occur in altcoins. Because when Bitcoin declines by 5%, altcoins lose value by 8-9%. Of course, similarly, lower cions rise faster in ascensions.
The seniors of the crypto world are saying, "Let this September pass, we have a clear path." And I say to myself, I guess they know something.
Thank you for taking the time to read and see you in my next post.
