The crypto markets are reeling amid reports of a fresh ban on crypto asset services in China.
Bitcoin plunged from $40,500 to a brief low of $30,415 in a span of just five hours, according to the latest data from CoinGecko. The top cryptocurrency then popped back to its current price of about $36,700.
The volatility comes as China reportedly widens its ban on cryptocurrency, implementing new rules to ensure financial institutions are barred from offering any services involving crypto assets. China banned initial coin offerings (ICOs) and crypto trading back in 2017.
Crypto analyst Michaël van de Poppe says he’s now looking to see if Bitcoin can close above $38,000.
“What I’m expecting to see on this daily candle for BTC is we’re going to have a close with a deep wick. And that deep wick usually ends with sideways action or a very fast bounce.
So it might be that we’re going to have a bounce above $38,000 or even $40,000 and close above this critical level. If that happens, I think we’re done. The correction is over and we’re going to continue. Does it look scary? Yes, of course. Even Ethereum is all the way back and it dropped even further from what I wanted to see.”
Analyst and veteran trader Tone Vays says the pain will likely continue in the short term. But he believes the sharp selloff could set the stage for Bitcoin to rise above $100,000 by the end of 2021.
“This correction is happening early enough in the year to get us over $100,000 by year’s end. So it’s not all bad.
From a technical perspective, we still have two to three more weeks to go of downside. But this is a horrendous week. It’s possible this week might mark the low and we’re just going to spend the next three weeks slowly going up.”
Analyst Scott Melker says the crazy market volatility is likely not over yet.
“It’s a lot deeper than I thought it would go, and I think that’s even the case for the bears. I don’t think most people saw this level of price action in their future…
I’m going to imagine we’re going to see some smoke clearing after this. It’s going to be somewhat insane because there’s a very good chance that what we just witnessed is massive, massive liquidations.”
Despite the huge correction, Melker says he believes the the bull cycle remains intact.
Analyst Josh Rager says he’s in buy mode, and purchased the smart contract asset Solana, along with some Bitcoin and Ethereum. He says he’s ready to cut his positions if needed, and traders must have an exit strategy.
“As a reminder, I’ll cut my positions if needed. Always do whats best for you, a lot of talk of buying on every dip on social media, but always be ready to exit if needed. You do whats best for you, don’t listen to others.”
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Bitcoin hit 53.6% pullback
Will be so annoyed if this was not the local bottom pic.twitter.com/1BMchJqWjJ
— Rager 📈 (@Rager) May 19, 2021
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