Bitcoin price is under intense pressure as China ramped up its crackdown of the cryptocurrency. The BTC price crashed to $32,200, which was the lowest level since June 8. Its market cap has also declined to more than $610 billion, down from the all-time high of more than $1.3 trillion.
China Bitcoin crackdown
China is the market leader in Bitcoin mining because of the relatively low cost of electricity. The country is also well-known for its low cost of doing business especially among many crypto miners. Indeed, the country has a market share of more than 70% in Bitcoin mining.
As such, the Bitcoin price is falling today after it emerged that the country was extending its crackdown on Bitcoin mining operations. This has become evidenced by the falling hash rates.
In theory, an exit of a major miner should be a good thing for Bitcoin. For example, in 2018, the price of copper jumped sharply after a strike led to the closure of the Escondida mine. However, the main issue is that this crackdown will likely lead to less demand from the country. For one, the country has already made it relatively difficult for customers to find exchanges in search engines.
Bitcoin price is also crashing after the hawkish Fed interest rate decision. The bank decided to leave interest rates and quantitative easing policy unchanged. But it pointed to the fact that high interest rates will come in 2023. Before that, the Fed will likely start tapering its asset purchases. In theory, higher rates should coincide with weak Bitcoin prices.
It is worth noting that the new measures by China are the main catalysts today. For one, US stocks, including the Nasdaq 10o index, are rising while bond yields have retreated.
Bitcoin price death cross
In my post-Fed Bitcoin price prediction, I said that the coin’s price could soon surge as investors react to the hawkish decision. I was wrong since the coin’s price has already lost more than $7,000 since the article went live. Still, my bullish view would only be confirmed if the price managed to move above $40,000.
Now, turning to the daily chart, the first thing that comes to mind is that the BTC price has formed a bearish flag pattern that is shown in black. In price action analysis, a bearish flag is usually a bearish signal.
Another bearish sign is the death cross that is emerging. A death cross happens when the 200-day and 50-day exponential moving averages make a bearish crossover. This seems to be about to happen.
Therefore, in my view, a deeper downward trend will be confirmed if the Bitcoin price manages to move below the lower side of the bearish flag pattern at $30,000.