InstaForex

September 27, 2021

The National Bank of China has outlawed Bitcoin

 The bitcoin cryptocurrency has crashed down once again. Back to the support level of $ 40,746, as we expected yesterday. However, this movement was not technical. However, we will talk about the reasons a little below. In the meantime, it should be noted that the downward trend for bitcoin remains, as the downward trend line remains relevant. The price has never managed to gain a foothold above the Ichimoku cloud during the last round of decline. Thus, the bulls cannot develop growth now. But at the same time, they keep the pair above the level of $ 40,746, which is now a certain critical level for cryptocurrency. At the same time, the trend line and the level of $ 40,746 form a kind of narrowing triangle, in which bitcoin is now squeezed. Thus, sooner or later, one of the boundaries of this triangle will be broken and the quotes will move in this direction. Thus, it remains to wait for the breakdown of one or another line.


Meanwhile, the National Bank of China continues to wage war with cryptocurrencies. Earlier, the Central Bank of China completely banned mining on its territory and also introduced serious restrictions for all companies that provide certain services related to the cryptocurrency segment. This step provoked an outflow of miners from the Middle Kingdom, and bitcoin has been experiencing serious problems for a long time. However, the story did not end there, as it became known yesterday that the Central Bank of China completely banned all cryptocurrency operations in the country. Now any use of cryptocurrencies will be regarded as illegal activity and will be punished by law. The official statement of the central bank says that this measure is aimed at stabilizing risks for the financial sector, as well as maintaining national security and social stability. Thus, as we can see, any central bank in the world has the opportunity to completely ban bitcoin at any time. Just a year ago, such a scenario was discussed by some experts. However, many of them believed that it was impossible to implement it in practice since bitcoin was already too deeply embedded in the financial system of the whole world. However, as we can see, in practice, the one who has the opportunity to change something is right. Therefore, the future of bitcoin and other cryptocurrencies will depend on the actions of central banks and governments. As long as they allow the whole world to play a game called "cryptocurrencies", which have no intrinsic value, bitcoin can maintain a long-term and positive attitude. But nothing prevents the European Union or the States from banning it. It should be recalled once again that no major central bank benefits from a currency (or its equivalent) that is beyond its control, and transactions for which cannot be tracked. After all, with the help of bitcoin, you can not only conduct various illegal transactions and finance terrorism. However, you can also hide income or evade taxes, which again is not beneficial to any government. Therefore, the trend is emerging to tighten the legal framework for cryptocurrencies in many countries of the world.


The trend on the 4-hour timeframe remains downward. Bitcoin fell to the support level of $ 40,746 for the third time and rebounded from it again. However, we recall that the level of $ 43,852 was also overcome on the third attempt, so nothing prevents the "bitcoin" from returning to the level of $ 40,746 again and overcoming it on the fourth attempt. At the same time, fixing the quotes of the "bitcoin" above the trend line will return it to an upward trend.