11.06.202109:07 Forex Analysis & Reviews: Chinese authorities have started to kick miners out!

During the penultimate trading day of the week, Bitcoin hit the $38,000 per coin level, which is also the 23.6% Fibonacci level, and rebounded from it. It is very clearly seen in the illustration below that each subsequent peak in value is lower than the previous one. We even formed a small downward trend line, from which the price also bounced yesterday. Recall that these are signs of a bearish trend. In March-April of this year, we have repeatedly drawn attention to the fact that the "bullish" trend was coming to an end on the same basis. As a result, the upward trend ended. Now, everything goes to the fact that today or tomorrow (the cryptocurrency market is open on weekends) there will be a new drop in the quotes of the main cryptocurrency. Bitcoin will be able to save itself from another fall only if it manages to gain a foothold above the trend line in the next couple of days.

Meanwhile, a wide variety of news is coming to the cryptocurrency market. Recall that in China, the authorities want to completely ban the mining of cryptocurrencies. It looks like this process has already begun. In Qinghai Province of China, the Industry and Information Technology Department has instructed all mining companies to cease operations. It is reported that the Department will strictly monitor any activity of large computer companies so that they do not try to disguise the mining of cryptocurrencies as a legal business. The same decision was previously made in the provinces of Xinjiang and Inner Mongolia. In the Sichuan province, miners were given time until September 2021. During this period, miners of digital assets must also completely scale back their cryptocurrency mining activities. The Chinese authorities explain their actions by concern about the use of electricity and the need to save it.

But in India, the country's authorities, on the contrary, have revised their attitude towards cryptocurrencies and, instead of a complete ban, they want to legalize the cryptocurrency sphere. Bitcoin could become a legal asset class with the Securities and Exchange Board overseeing its regulation. Thus, the fundamental background of recent days for bitcoin is controversial, and news from China is more important, since it is there that most of the world's mining capacities are concentrated. This does not mean that all Chinese miners will simply cease their activities. They will probably move the equipment to countries that are more friendly to mining. However, this means that for a certain time, the network hash rate will drop down again. Moreover, the unfriendly attitude of the Chinese authorities towards bitcoin can discourage many investors from the cryptocurrency segment. So, it is not the time to celebrate just yet because of the news from India alone. In fact, nothing has yet been legalized there. The overall fundamental background remains more negative than positive.

In technical terms, Bitcoin has shown an increase of $7,500 in the last 4 days. However, this does not mean anything special for Bitcoin. A rebound from the trendline and the 23.6% Fibonacci level could put Bitcoin back on the downward trend. In this case, the quotes will again tend to the support level of $30,500, which last time did not reach $500. We still consider the corrective scenario as the main one and believe that in the coming months the quotes may fall below the level of $30,500.