Bitcoin's key support at 41,980.24 is broken. Above it, the main cryptocurrency and the market as a whole still had a chance of recovery. But a blow from China, where a new ban was imposed on cryptocurrencies, intensified the sell-off.
On Wednesday, China banned financial institutions from conducting any cryptocurrency transactions.
The reason for the ban, according to the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China, is the high volatility of bitcoin. This is a threat to the economy, property of the population, their security, and the established financial order.
"Cryptocurrency prices have skyrocketed and dropped recently, and speculative cryptocurrency trading has recovered, seriously encroaching on the safety of people's property and disrupting the normal economic and financial order," the institutions said in a statement.
The level of 34,708.27 for bitcoin, which was mentioned in yesterday's review, was not only reached, but also broken at the time of this writing. The next technical target downward for bitcoin is the support level of $28,392.99 per coin if the breakout of the horizontal level of 34,708.27 turns out to be true.
The current volatility is caused by panic. Bitcoin lost almost 22% in 24 hours. First, Elon Musk, who created the trigger for the fall, and now China. How long this story will last is unclear. On the one hand, it will depend on the news background, which will either strengthen sales or, conversely, calm the market down. On the other hand, technical targets downward for bitcoin after the horizontal level of 28,392.99 are at 24,220.97 and 19,418.19. We are not talking about their achievement yet, but the market is very volatile, anything is possible.
One thing is clear: even opening short positions in this situation is very risky. Catching falling knives is a losing strategy. To look for an entry point, in my opinion, is best after the situation has stabilized a little, at least after the close of today's daily candle.
