Bitcoin (BTC) Tanks Under $40,000 after China’s Crypto Warnings, Next Support At $35,000
The crazy Bitcoin (BTC) price crash doesn't seem to be stopping anytime soon. The Bitcoin price has plunged another 12% in the last 24 hours with its price going under $40,000 for the first time in the last three months since February 2021.
The Bitcoin market dominance has also tanked under 40% going to its lowest levels in the last three years. Bitcoin (BTC) has lost over 30% of its price over the last week following a number of news in the market.
Firstly, Tesla announced that it will drop the decision to accept Bitcoin payments against it car purchases citing environmental concerns. The flip in the decision came in a very short period of just months thereby rattling its investors and the market.
Earlier this week, Elon Musk further doubled down on his Bitcoin criticism saying that the world’s largest cryptocurrency is “highly centralized” and controlled by some handful of miners sitting in China. Elon Musk’s comments always carry some huge weight thereby pushing Bitcoin price even lower and under $42,000 earlier on Monday.
After Bitcoin barely managed to hold up after Monday’s blow, the Chinese authorities went for a further crackdown. On Tuesday, three state-backed financial institutions issued a joint warning while explaining risks associated with the highly volatile cryptocurrencies.
Thus it announced that Chinese banks and payments institutions cannot conduct an sort of business related to cryptocurrencies. These institutions banned a number of crypto-related activities including crypto registration, crypto trading, clearing as well as settlement.
The state-backed regulators said that these measures are taken to curb speculative trading and draw a clear distinction with China’s own CNDC Digital Yuan. Referring to cryptocurrencies in general, the regulators issued a joint statement noting: “The prices of cryptocurrencies have fluctuated wildly recently. Speculation has returned, which seriously damages people’s asset safety and disrupts normal economic and financial order.”
Besides, the warning also notes that these cryptocurrencies shouldn’t be classified as money. “They should not and shall not be circulated on the market as a currency,” they said. Further adding, the state-backed institutions noted that digital currencies don’t have any intrinsic value and their prices can be “easily manipulated”.
Along with Bitcoin (BTC) the altcoin space is also facing major heat of China’s crackdown. Ethereum (ETH) price too has dropped below $3000 after hitting a high of $4400 last week.
The overall cryptocurrency market cap has dropped under $2 trillion while the next support levels for Bitcoin are $38,000 and $35,000.