Saturday, November 27

China and the US torpedo the bullish rally of bitcoin and ether

The price of bitcoin plunged around 5 percent and chained three sessions of declines, pushing prices to $ 60,900.

The correction move also affected ether, which fell more than 5 percent to $ 4,300. Other currencies such as the chainlink or the cardano lost almost 10 percent of their value.

Taken together, the crypto asset market tumbled 7 percent and lost 2.8 trillion in capitalization, according to Coingecko data.

The good moment of the market anticipated the assault on new all-time highs for bitcoin and also for ether. But news from China and the United States put a stop to the rally.

The US infrastructure bill affects bitcoin

One of the reasons for this downward retreat has to do with the infrastructure bill in the United States.

“The signing of the project initiated the liquidation because investors are concerned about regulation and taxes,” said Hayden Hughes, CEO of Alpha Impact.

The new tax clearance requirements for digital currencies are part of the 550 billion infrastructure bill that President Joe Biden just signed into law.

China strikes again

On the other hand, analysts also cited market concerns over the continued regulatory crackdown in China, after declaring all transactions with crypto assets illegal.

In a further twist, the country will explore the option of imposing punitive energy prices for companies involved in cryptocurrency mining, National Development and Reform Commission spokesperson Meng Wei said at a press conference. .

Despite these threats, bitcoin has doubled in value so far this year, while ether has multiplied its price by six.

However, investors took advantage of the news from China and the United States as an excuse to take profits.

In addition, the analysts of Kaiko Research They argued that the same risk aversion that hit exchanges in recent sessions ended up spreading to the crypto market.

Pause in progress

In fact, some technical indicators pointed out that the overbought in the market was very high, so the experts considered the possibility that there would be a pause in the rises.

“It would take a while to move forward without corrections,” said Vijay Ayyar, Asia Pacific director of the Luno exchange house. According to this expert, what we are seeing is “a healthy setback.”

After these falls, the price of ether will seek support in the psychological zone of $ 4,000, while bitcoin will do so at $ 60,000, according to the analysts consulted.

Twitter CFO charges against bitcoin

Another reason to justify the falls are the statements of Twitter’s CFO, Ned Segal. Just like informó ‘The Wall Street Journal’, The executive said that investing cash in crypto assets like bitcoin “doesn’t make sense” right now.

The lack of accounting regulations and high price volatility are critical factors, Segal said, preventing the company from diversifying into cryptocurrencies.

And to all this must be added the unstoppable rise in the dollar, which is at a sixteen-month high against the euro, due to expectations of rate hikes in the United States.

As with gold, any increase in the price of the dollar is negative for bitcoin, which loses value relative to the fiat currency.

Despite these corrections, the fundamentals that drove the market remain in place. Especially in the case of ether, the currency that will benefit the most from the metaverse and the emergence of protocols linked to DeFi 2.0 applications.

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