China announced an update to its regulation on the use of cryptocurrencies. Bitcoin’s price dropped from USD 7,200 for the first time since May.
The price of Bitcoin (BTC) fell approximately 10% in recent days. The value of the main cryptocurrency in the market went from being close to USD 8,000 to being below USD 7,200 for the first time since May 2019.
At the time of writing this article, the price of BTC is USD 7,155, according to data from CoinMarketCap. At its lowest point on November 22nd, the price remained just above USD 7,100. Since May 17th, specifically, the price of Bitcoin had not fallen to such low levels.
That drop in the price of Bitcoin caused the entire cryptocurrency market to suffer. Even other cryptocurrencies in the top 20 according to their market capitalization have larger percentage losses. Such is the case of NEO, which has -13.94% at the time of writing this note.
Other cryptocurrencies with losses greater than 10% on November 22nd are Chainlink (LINK), Ether (ETH), Bitcoin Cash (BCH) and EOS. Only two of the cryptocurrencies did not record losses of at least 5% between November 21st and 22nd. These are Unus Sed Leo (LEO) and Tezos (XTZ), with a fall of 2.42% and 4.45%, respectively.
Fall Due to China
One of the reasons for this abrupt market decline may have been an update issued on Thursday, November 21st, by the People’s Bank of China due to its regulatory stance against the use of cryptocurrencies. In this update, the Chinese government announces a resurgence of its policy against cryptocurrency exchange houses.
It was also announced that the Chinese authorities are investigating a list of at least 39 cryptocurrency companies that would be operating illegally, bypassing the restrictions in force in the Asian country. Precisely, China is in a crusade against possible scams associated with blockchains and cryptocurrencies.
According to Dovey Wan, cryptocurrency ecosystem analyst focused on the Asian market, the companies mentioned on the list are probably Ponzi schemes or other types of scams. Via Twitter, Wan said that this was a logical conclusion, considering that the investigation arose from the locality of Shenzhen, commonly associated with this type of scheme.
The analyst added that the exchange houses that have been used by the alleged scams could also be affected by the investigation that is being conducted at the moment.
Bitcoin’s Price Floor Shakes
Amid cryptocurrency market volatility, predictions about possible movements abound. Recently, analyst Willy Woo, one of the most prominent for monitoring the cryptocurrency market, expressed his vision of a possible price floor around USD 7,000 for Bitcoin.
A report by the firm Delphi Digital also establishes a possible price floor relatively close to USD 7,400. Although the low on Friday, November 22nd, placed the price of Bitcoin below that figure, the range is still close.
Other analysts are less optimistic about the future of the main cryptocurrency. For example, Peter Schiff, stockbroker and president of Euro Pacific Capital, expects a total price collapse. This is nothing new, given that Schiff has historically been one of the biggest critics of Bitcoin.
By Willmen Blanco