The latest dose of China FUD banning bitcoin yet again; Bitcoin and Ethereum technical analysis and price action
- China Bans Bitcoin – Is it different this time?
Beginner’s Guide to Learning Technical Analysis
How many times can China ban bitcoin, again?
It almost seems as if China has been purposely FUD-ing the crypto market the way the country has been feeding the world bearish narrative after bearish narrative. The latest dose of China FUD is tied to China announcing a ban on Bitcoin. The People’s Bank of China (PBOC) stated on Friday September 24th, that “Virtual currency-related business activities” are illegal financial activities, and those who engage in “illegal financial activities” are committing a crime and will be prosecuted. Trading crypto has officially been banned in China since 2019 but has continued online through foreign exchanges. The PBOC also stated that foreign websites who provide services to Chinese citizens online are also committing an illegal activity.
This isn’t China’s first rodeo when it comes to announcing a crypto crackdown, and China has been going back and forth with regulators since 2013 so it’s hard to tell if this time is really different or not. Some may look at this news as a buying opportunity before the next leg up.
BTC Daily Chart
BTC Weekly Chart
At the time of writing, Bitcoin/USD is currently sitting right on top of the old range high at $42K. This is a critical area (as stated in last week’s article) because price spent 10 weeks consolidating in this range throughout the summer before it broke out. In my opinion, $42K down to $38K (highlighted in yellow) is the LAST area of defense for bulls. This is a must hold area for the bullish narrative to continue. If bulls want to see a new All-time high during this bull run it is extremely important that we do not have a weekly close under this level.
Bitcoin Bull Scenario
Bitcoin stays above the $38k – $42k area on a weekly closing basis and attempts to reclaim the $44k level again.
Bitcoin Bear Scenario
A weekly close below the $42k area and I would be very concerned. The absolute last level of defense would be $38K in my opinion. It is especially important that this area holds up for Bitcoin/USD to remain bullish.
ETH Daily Chart
ETH Weekly Chart
At the time of writing, Ethereum/USD is currently $2907. Ethereum is at the mercy of Bitcoin, and it can only be bullish if Bitcoin stays bullish. $2.9k is a daily support for Ethereum, but if BTC/USD decides to nuke then ETH/USD will nuke even harder. $2.7k is a must hold area for Ethereum.
Ethereum Bull Scenario
Ethereum stays above the $2.9k area on a daily closing basis and attempts to reclaim the $3.1k level again.
Ethereum Bear Scenario
A daily close below the $2.9k area and I would be very concerned. The absolute last level of defense would be $2.7K in my opinion. It is very important that this area holds up for ETH/USD to remain bullish. As I stated in last week’s article, Ethereum will only be bullish if Bitcoin is bullish. For now, we will have to keep a close watch on Bitcoin’s performance.