Cryptocurrency market remains under a heavy pressure facing strong headwinds from global regulators and authorities that are taking a tougher stance against the “volatile and dangerous” market day by day. Bitcoin price briefly slipped below the $6,000 mark on Tuesday, down to fresh mid-November lows in the $5,810 area, -14% on the day.
The current fallout in cryptocurrencies is exacerbated by a widespread panic in the global stock markets amid rising bond yields and inflation expectations. This risk-off environment discourages the risky digital assets even more, especially now, when the market is so vulnerable under the regulators’ pressure. By the way, it looks like the Chinese authorities are intended to eliminate cryptocurrency trading in the country completely. In particular, the Central bank decided to block access to all domestic and foreign cryptocurrency exchanges and ICO websites, on top of that the China has already banned bitcoin exchanges and ICOs in late 2017.
In such conditions, further signs of furious crypto crackdown will likely make bitcoin and other digital currencies extend their losses before they find a bottom. Now bitcoin is in a striking distance of the $5,000 support which could temper the bears a bit and open the way for a short-term consolidation. A slide below this level will open the way to $3,500. On the other hand, the current low levels may attract some buyers in the $6,000 region and ease the immediate bearish pressure on prices.
By Helen Rush
Senior Analyst at Capital Markets