The situation in the cryptocurrency market remains depressing. Almost all major digital currencies have been refreshing their multi-month lows for a few weeks now. Bitcoin is facing the same difficulties. A week ago, the Bitcoin (BitfinexUSD) oscillated around $ 8500. Today, one token of Bitcoin will cost you about $ 7400. Last Monday, the rate sank even lower - the price almost tested the $ 6500 support.
Most experts agree that the selloff is likely to continue. In this scenario, the closest benchmark for the BTC/USD pair may become the $5000 mark. We recommended paying attention to this target level in our previous review. Strengthening of protectionism in favor of traditional currencies in the Asia-Pacific region, which is actively manifested in tightening of control over all cryptocurrency-related transactions, continues to affect the market moods.
A few days ago, the People's Bank of China issued the document updating its rules to restrict operations with crypto coins. PBOC considers them "illegal, unauthorized public offerings and issuance of securities, potentially illegal fundraising, financial fraud, pyramid schemes, and other crimes". To prove its serious intentions, from November 14 to November 22 the Chinese regulator has investigated cryptocurrency exchanges for illegal activities. The target of this investigation were companies that conduct cryptocurrency trading, token sales, and distributions of tokens from overseas ICOs. The finance bureau of Shenzhen municipality has identified 39 undisclosed cryptocurrency exchanges, which activity, as everyone understands, has been banned.
Additional downward pressure on BTC/USD was caused by a failed economic crisis. The threat of an impending global financial crisis that was supposed to completely undermine the faith in the traditional financial system and fiat money has apparently passed. Looks like the US has managed to survive a recession, the Eurozone economy is gradually recovering, England has succeeded in avoiding the “hard” Brexit, and the most popular topic in recent months - the US-China trade war - is approaching its logical end. China’s representatives made their most positive message in recent weeks on Tuesday, saying that trade talks with the U.S. were going in a smooth, constructive manner.
These comments followed a phone call between Chinese Vice Premier Liu He, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, renewing market optimism and raising hopes that the two parties may finally resolve their ‘core concerns’. It is worth noting that Beijing and Washington have recently concluded a preliminary agreement according to which China would buy more farm products from the U.S. state-owned companies, while the United States would forgo its planned tariff increase next week. All in all, amid stabilizing global economic situation, expectations of Bitcoin growth and its popularity as a hedging instrument against risks, are no longer relevant. Under these circumstances, it’s not surprising that the BTC/USD rate keeps plummeting.