A short-term momentum could cause a drop to USD 38,000, but the bulls need to defend the support at USD 40,200. The weekly candlestick chart indicates that buyers could have triggered a bullish move in the medium term.

The People’s Bank of China (PBOC) is again putting pressure on the market for Bitcoin and other cryptocurrencies. On this occasion, the monetary authority said that all transactions related to cryptocurrencies are illegal, for which it prohibits them.

The prices of the different crypto assets on the market did not take long to react to the announcement of the PBOC. In the case of Bitcoin, its value fell again, losing around 5.94% in 24 hours after having recovered strongly.

The price of Ether has fallen a bit more, accumulating a loss of 8.94% in 24 hours. Concerning Cardano, it did not suffer that much as it only fell by around 2.42% in the same period.

The bans by the PBOC also reached foreign exchanges that offer their services in China, as that institution considers them illegal. They also strictly prohibited services that offer trading, order matching, derivatives for cryptocurrencies, and issuance of tokens.

In early 2021, China announced a severe crackdown against cryptocurrency mining. That caused a significant drop in the mining power that keeps the network safe and a crash in the price of cryptocurrencies.

China seeks to meet its climate goals by suppressing the mining of Bitcoin and other cryptocurrencies on its territory. The country expects to go from being the largest carbon emitter to being carbon-free by 2060.

Bitcoin Metrics After China’s Decision

Although the bearish force is a factor of great relevance, investors seem to continue to take advantage of discount prices.

Korean analyst Mignolet shows the cash flow ratio metric between activity on exchanges and transaction volume. That indicator has fallen to its lowest level since October 2020.

He also reviews the transferred token indicator to analyze all movement on the Bitcoin network. That reflects that the cryptocurrency is more active than in October of last year.

When analyzing the correlation of that data with past events, it is possible to think that investors are taking advantage of this moment to accumulate.

The Price Still Has Problems in the Short Term

The daily chart shows an undoubtedly bearish trend in the cryptocurrency market. The 8-day EMA and 18-day SMA are crossing to the downside and are working as dynamic resistances.

The 200-day SMA, which follows the higher trend, is also sending a negative signal.

Right now, there is short-term momentum under development, which could cause a drop to USD 38,000. If the bulls fail to defend the support at USD 40,200, that could be a likely scenario.

Buyers could still put pressure on the price in the short term and invalidate the FUD (fear, uncertainty, and doubt) raised by China.

Weekly Chart indicates that the Scenario is Not So Daunting

The weekly candlestick chart indicates the possibility that buyers who have triggered a medium-term bullish move will defend the support at USD 40,200. Furthermore, it reveals that there has been a profit above 40% from the low of USD 28,850 in late June.

However, the current scenario in lower time frames puts into play the bullish outlook in the short term. The bears are not very strong yet, so it is necessary to continue to monitor the current volatility.

By Willmen Blanco

The PBOC believes that cryptocurrencies have contributed to spreading illegal activities such as money laundering. The monetary authority said that Ether and Bitcoin are not legal tenders, for which it prohibited their circulation as currencies.

Just seconds before China officially announced that it would ban cryptocurrencies, a Bitcoin miner managed to mine 1,366 bitcoins. The data reveals that another miner was able to withdraw USD 58 million worth of cryptocurrencies before the statement by Beijing.

The first miner took out 1,366 BTC before the announcement, having withdrawn 952 BTC the day before.

The Bank of China (PBOC) banned the use of cryptocurrencies within the country. They allege that the increase in the trading of cryptocurrencies is altering the economic and financial order.

The institution said that cryptocurrencies have also contributed to the growth of illegal and criminal activities. The PBOC believes that fraud, pyramid schemes, and money laundering put the security of people’s property at risk.

They said they would close cryptocurrency mines and would not allow new ones to open. Due in part to the low cost of electricity, China was one of the top countries in the world for such operations.

The Asian country monopolized in April 46% of the computational power to mine and process those assets, the Cambridge Bitcoin Electricity Consumption Index indicated.

In the past week, the value of Bitcoin and other cryptocurrencies fell rapidly due to fears that Chinese real estate firm Evergrande would go bankrupt. Many believe that could affect other companies in that sector inside and outside Asia.

Pressure on Bitcoin and Other Cryptocurrencies Increases

The announcement by the PBOC increases the pressure that China has been putting on cryptocurrencies since 2017. The ban is a measure in favor of the environment, as cryptocurrency mining requires consuming a lot of electricity, leading to carbon emissions. In addition, there is a fierce campaign to increase the state’s control over the economy and limit excessive risks in the financial system.

In 2017, the Chinese authorities had already closed national cryptocurrency exchange platforms. In 2019, the PBOC announced that it would block access to websites that advertised cryptocurrency offers.

Effects the Announcement Has Caused on Bitcoin

The monetary authority, the Central Administration of Cyberspace, and the Ministry of Public Security said that the cryptocurrency market was related to illegal activities. These include money laundering, illegal fundraising, fraud, and pyramid schemes, among others.

The PBOC specifically refers to Ether and Bitcoin as they are virtual currencies issued by non-monetary authorities. They say that they do not have the same status as legal tender, so they cannot circulate on the market as currencies.

The creation and trading of cryptocurrencies have been illegal activities in China since 2019. However, their new positioning has forced banks to curb such transactions. The fear that those assets cause them will lead them to close a large part of the Bitcoin network in the Asian country.

The statement by the PBOC has been the strongest signal from the Chinese government to stop the use of decentralized cryptocurrencies. In that sense, they continue developing the digital yuan, their central bank digital currency (CBDC) project.

By Alexander Salazar

The price of Solana rises above 100%, reaching a new all-time high. The value of Avalanche grows by more than 47%, and its number of transactions increases by more than 500% in one month.

The general crypto market has shown some ups and downs so far in September. Although it started the month with a significant recovery trend, the price of most altcoins has fallen in the last two weeks.

Amid those ups and downs, two cryptocurrencies lead the monthly top, exhibiting a rising average. According to Live Coin Watch, Solana (SOL) hit a new all-time high while the volume of Avalanche (AVAX) transactions grew by more than 500%.

The price of Bitcoin (BTC) has fallen by around 9.9% so far this month. It ranged between USD 40,769 and USD 52,615, a high that it reached on September 6^th.

The most recent drop in the value of the BTC market and the rest of the markets could be due to Evergrande’s liquidity crisis. That real estate company, one of the largest in China, might not be able to meet million-dollar interest payments.

Solana Reaches a New All-Time High in September

Although Solana is a blockchain of only 18 months, it is in the top 10 cryptocurrencies with the largest market capitalization. That takes place amid expectations that it will become one of Ethereum’s main competitors in the long term.

SOL has substantially advanced in September, reaching an all-time high above USD 214 and a growth of more than 66%. During that expansion, the platform was a victim of its own success as it suffered a crash in the middle of the month.

A stoppage of the cryptocurrency Solana led to a halt to block mining for more than 8 hours. That caused an unintended fork of the network due to a problem that miners had to face. The failure may have occurred due to saturation for an excessive number of transactions or a denial of service (DoS) attack.

That event did not directly impact the price of SOL, as it remained above USD 160. Solana’s market capitalization is more than USD 41 billion, and the daily trading volume is above USD 2.9 billion.

The Number of Avalanche Transactions Grows by Over 500%

The Avalanche cryptocurrency, AVAX, has remained among the most appreciated cryptocurrencies for three weeks. Its growth of more than 47% in 30 days also places it on that list.

On September 18^th, the cryptocurrency peaked at USD 75.09, the highest value in its history. The price of AVAX exceeded the previous figure on the 23^rd of this month when it traded at USD 79.41.

Daily network transactions increased from 43,243 on August 18^th to 220,222 on September 12^th by around 500%. The new all-time high occurred as AVAX rallied after the general market crash of September 20^th.

The market capitalization of AVAX is more than USD 15,260 million, and the daily trading volume is above USD 1,134 million.

By Alexander Salazar

The loss of the private key is one of the reasons why the number of inactive wallets has grown. Laboure expressed concern about the poor regulation on cryptocurrencies and their possible harm to the environment but predicted Bitcoin would remain dominant.

An anonymous Bitcoin holder recently unlocked 400 BTC from his wallet, which had been dormant for almost nine years. According to WhaleAlert, that amount exceeds USD 17 million at the current price of the cryptocurrency on the market.

The 400 BTC of the inactive wallet was worth USD 4,355 in 2012, so its price grew by 4,000%. Reports on the activation of that portfolio are emerging in the crypto-asset market.

This year, the owners of many dormant Bitcoin wallets have activated them, thus turning into whales. On September 19^th, 2021, a Bitcoin holder unlocked 616 BTC from a wallet inactive for nine years.

Investors who want to access their cryptocurrencies from their wallets could face a hectic task. According to 2020 data, nearly 3.6 million BTC has been idle for almost five years. The loss of the private key by Bitcoin holders has contributed to the growing number of inactive wallets.

Deutsche Bank Analyst Predicts that Bitcoin Will Turn Into Digital Gold

Marion Laboure, an analyst at Deutsche Bank, predicts that Bitcoin will play the role of digital gold in the future. She believes that such a situation will last for centuries and that no government will exercise any control over the cryptocurrency.

According to the Deutsche Bank website, Laboure said that she could see Bitcoin become the digital gold of the 21^st century. However, the researcher warned investors about the volatility of the pioneering cryptocurrency. She believes that Bitcoin (BTC) purchases seek to invest and speculate rather than hold the coins as a medium of exchange.

Laboure stated that only a few additional large purchases or market outflows could significantly affect supply and demand. The economist explained that Bitcoin is too volatile to be a reliable store of value but expects it to remain that way.

The Deutsche Bank analyst expressed concern about the lack of regulation of cryptocurrencies and its possible harm to the environment. However, she hinted that Bitcoin could remain the dominant crypto asset in the cryptocurrency space.

She said Ether has more use cases in decentralized finance and non-fungible tokens. Of course, she recalled that Bitcoin has the advantage of being the first of its kind.

Yemeni Fights Hunger with Crypto Donations amid Civil War

A citizen living in Sana’a, the capital of Yemen, claims that he is fighting hunger with cryptocurrencies. He said he uses them to buy food packages for families who cannot access supplies amid a civil war.

According to Reddit, the Yemeni has raised about USD 12,000 in cryptocurrency donations to combat that problem in the Middle Eastern nation. He said he had provided 15 families with flour, rice, oil, and beans, hoping to help 30 more soon.

By Alexander Salazar

Moving averages are lines that show the average price over a certain period and allow identifying trends. Amid a market full of greed, the FOMO usually takes over small investors.

Successfully trading cryptocurrencies can be a very complex task, but indicators can help smooth the way. Those tools process information and provide an analysis that allows predicting the price behavior of those assets.

Each indicator is helpful on a specific occasion, but none infallibly predicts what will happen to the price. However, it is advisable to analyze and test each one and adapt it to the personal cryptocurrency trading strategy.

Fibonacci Retracements Indicate the Resumption of a Trend

The Fibonacci sequence is an infinite sequence in which each number results from the sum of its previous two. Analysts usually use Fibonacci Retracements, consisting of a rule drawn from the start to the end of the momentum.

The purpose is to identify areas where the price may stop correcting to resume the trend.

The most used retracement levels are 23.60%, 38.20%, 61.80% and 78.60%. For example, the price of Bitcoin recently stopped correcting above the 61.8% Fibonacci. Many technical analysts regard that level as the sweet spot for retracement.

Moving Averages Help Identify Trends, Supports, and Resistances

One of the indicators that analysts use the most is moving averages, as they are helpful and easy to interpret. They are lines that show the average price during a given period.

As that indicator smooths the fluctuation of a price, experts use it to identify trends, supports, and resistances.

The crossover of the exponential moving average (EMA) of 8 above the simple moving average (SMA) of 18 indicates a bullish change in the trend. If the opposite occurs, the crossover will be a bearish signal.

The 200-period SMA gives an idea of the higher trend.

For example, the 8 EMA recently passed above the 18 SMA, signaling the beginning of an upward trend, which then developed. Also, those moving averages functioned as dynamic supports amid the rally.

Meanwhile, the 200-day SMA turned bullish on the way, and it appears to be working as dynamic support for the price of Bitcoin.

The S2F Allows Knowing When Bitcoin Will Reach the Total Coins in Circulation

Stock to Flow (S2F) is popular in the world of cryptocurrencies, as it performs a calculation that predicts the possible future price of Bitcoin. Although no indicator is infallible, this one has been making good forecasts.

As BTC has a limited supply, the Stock to Flow model allows finding how many years it takes to reach the number of coins in circulation. A higher calculation result will indicate that the price will rise.

Although the current price has moved quite far from the indicator, it is already beginning to show a rebound. It could be seeking to get closer to the USD 100,000 forecast before 2021 ends.

The Fear and Greed Index Allows Detecting the Best Moment to Market

The fear and greed index allows detecting the sentiment of the cryptocurrency market and a good time to buy or sell.

This index comprises 25% volatility, 25% market volume, 15% activity on social networks, 15% surveys, 10% dominance, and 10% trends. Analysis of that data resulted in reliable market sentiment, identifying an environment of greed or fear.

When the market is full of greed, the FOMO usually carries small investors away. On the contrary, amid extreme fear, sellers may sell irrationally. Besides, the dip bottom may have already arrived or is about to do it.

By Alexander Salazar