Over the past week, the entire market has been somewhat volatile, but one event still outperformed the others. In less than three hours, the price of Bitcoin fell by as much as 10% to $40,983. The market capitalization of the cryptocurrency markets has fallen from $2 trillion to $1.8 trillion.
China’s central bank has declared all cryptocurrency transactions illegal, thus banning digital tokens such as Bitcoin. Markets are recovering as of this writing.
Bitcoin price:
Against the heavy volume, Bitcoin (BTC) found resistance around $40,700. The most likely price action in this case is a sideways trade in the $41,000-$44,500 area. The ban on bitcoin in China has left traders in a state of jitters.
After China announced a ‘crypto ban’ that sent bitcoin’s price down to $40,600, the bitcoin derivatives markets switched from neutral to bearish. If Bitcoin confirms $47.5K-$48K resistance, the downside breakout will be confirmed. To change this situation, the bulls must recover and hold above $48,000.
Also Read: Who Will Reach 100K First, Bitcoin Price or Number of Bans in China!!!
Bitcoin supply will not meet demand?
Since April, nearly 2,000,000 BTC has been transferred from short-term holders to long-term holders, according to the company’s latest data. The data clearly shows that “supply will not be able to meet demand,” according to Raphael Schultz-Kraft of Glassnode.
Cryptocurrency analyst William Clemente is also looking for new data on the Bitcoin offering. According to him, the BTC supply crunch ratio, which measures how much Bitcoin is held by strong versus weak hands, is showing upward divergence.
Clemente notes that the current amount of activity on the chain is comparable to what happened in June and July, before the largest digital asset by market capitalization saw a spike in August.