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The price of Bitcoin (BTC) has fallen by more than 3% in the past two days. Withdrawal of the dominant cryptocurrency comes amid growing regulatory pressure in China and Hong Kong.
History of the FUD exchange over the past month
On October 16, major Bitcoin futures exchange OKEx suspended withdrawals after one of its private key holders was reportedly arrested.
Just 17 days later, speculation surfaced that Huobi, a Singapore-based exchange with an office in Hong Kong, could face regulatory pressure after data showed massive withdrawals of Bitcoin and Tether on November 2.
However, Huobi Global reiterated that the exchange is functioning normally and that deposits and withdrawals “work as expected”.
Today, Reuters reported that Hong Kong regulators will propose that all cryptocurrency exchanges be regulated and require a license for the Securities and Futures Commission, or SFC, as opposed to the previous opt-in approach, which many exchanges have. refused to do.
It comes a year after the Hong Kong government released the rules for cryptocurrency exchanges. Ashley Alder, chief executive of the SFC, said on November 3:
“This is a significant limitation, as under the current legislative framework if a platform operator is truly determined to operate completely off the regulatory radar, they can do so by simply making sure their traded crypto assets fall outside the legal definition of a stock.”
“We can declare that the Bitcoin honeymoon phase is over”
Despite the subtle wording of the SFC’s statement, industry insiders have said that it is essentially a statement to end Bitcoin’s honeymoon phase. Leo Weese, the co-founder of the Bitcoin Association of Hong Kong, She said:
“With rumors of other cryptocurrency exchange officials arrested in China and Hong Kong’s move to make the trade illegal (aka authorized), we can declare that Bitcoin’s honeymoon phase is over. If you think Bitcoin will catch on. , buy it now while you can. “
Kelvin Koh, a partner at Asia-based cryptocurrency investment firm Spartan Group, said times are no coincidence. It comes after the pilot launch of China’s digital currency electronic payment system, which has already processed over four million transactions. He explained:
“The timing of China’s OTC and exchange crackdowns is no coincidence. The GOC is sending a strong message about its stance on cryptocurrencies other than DCEP. “
What will BTC’s next step be?
Bitcoin’s price reacted with a slight drop in price, dropping from $ 14,100 at the peak of the month to under $ 13,500. While the reaction was minimal, a further decline could have negative implications for BTC’s short-term performance.
Technically, Bitcoin’s short-term support is $ 13,300. Below it is the $ 12,900 support area and the $ 12,200 level, which is the five-day moving average on the monthly chart.
On November 2, before Bitcoin’s decline occurred, full-time trader on the Amsterdam Stock Exchange Michael van de Poppe said that the $ 12,700 to $ 12,900 range is a strong short-term support area. He She said:
“Still trending up, but some strength is lacking here. It must hold above $ 13,550–13,650 for support. If so, $ 14,000 new tests on the horizon. Losing and targeting $ 12,700-12,900 “.
So far, Bitcoin’s response to rumors of regulatory crackdown has been less. If BTC manages to stay above $ 13,000 in the short term, the outlook is likely to remain positive.
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