Bitcoin (BTC) is down more than 3% in the past two days. The fall in the dominant cryptocurrency comes amid increasing regulatory pressure in China and Hong Kong.
RD&D exchange plan for the last month
On October 16, OKEx, the leader of the bitcoin futures exchange, suspended withdrawals following the arrest of one of the key holders.
Just 17 days later, speculation emerged that Huobi, a Singapore-based stock exchange headquartered in Hong Kong, could come under regulatory pressure after data showed huge Bitcoin and Tether withdrawals on November 2.
Huobi BTC floats from October 26th to November. Source: CryptoQuant
However, Huobi Global reiterated that the stock exchange is functioning normally and deposits and withdrawals are as expected.
Reuters reported today that Hong Kong regulators will offer to regulate all cryptocurrency exchanges and apply for a Securities and Futures Commission or SFC license, in contrast to a previous approach that many exchanges refused to take.
This happened a year after the Hong Kong government published cryptocurrency exchange rules. Ashley Alder, CEO of the SFC, stated on November 3:
“ This is a major limitation, as in the current regulatory framework, if a platform operator is truly determined to act completely outside the regulatory radar, it can do so simply by making sure that the cryptocurrencies in circulation do not fall within the legal definition of security.
“We can announce the end of the bitcoin honeymoon.”
Despite the careful wording of the SFC’s statement, industry experts said it was actually the announcement of the end of Bitcoin’s honeymoon. Liu Weiss, co-founder of the Hong Kong Bitcoin Society, said:
With rumors that several cryptocurrency exchange officials arrested in China and Hong Kong have gone into illegal trading (also known as licensing), we may announce the end of the Bitcoin honeymoon. If you think bitcoin will spread, buy it now. It is still possible. ”
Kelvin Ko, partner of Asian cryptocurrency investor Spartan Group, said this was no coincidence. This comes after a trial launch of an electronic digital currency payment system in China, which has already processed more than four million transactions. This is for explanation:
“The timing of China’s stringent OTC and foreign exchange measures is not accidental. The Government of the People’s Republic of China has clearly stated its position regarding cryptocurrencies other than DCEP. ”
Where will BTC go next?
The bitcoin price reacted to the slight fall in prices, dropping from $ 14,100 at the peak of the month to below $ 13,500. Although the reaction was minimal, further declines could negatively impact BTC’s short-term trend.
Technically, Bitcoin’s short-term support is $ 13,300. Below is the support zone for the $ 12,900 and $ 12,200 levels, which is a five-day moving average on a monthly chart.
On November 2, ahead of Bitcoin’s fall, Amsterdam Stock Exchange trader Michael Van de Pope said the $ 12,700 to $ 12,900 range is a strong support area in the short term. He said:
Still on the rise, but a little lacking in strength. Over $ 13,550-13,650 must be withheld for support. If this is true, there will be $ 14,000 renewed tests on the horizon. I’m losing and I’m planning $ 12,700-12,900. ”
So far, Bitcoin has responded to rumors of regulatory violations. If BTC manages to hold above $ 13,000 in the short term, the outlook is likely to remain positive.