People who are keeping an eye on the bitcoin price may wonder what is happening right now. With the bitcoin price dropping by quite a margin for no apparent reason, there is a lot of speculation and confusion among cryptocurrency enthusiasts. Rest assured this has nothing do with the impending SEC decision regarding the bitcoin ETF.
Bitcoin Price Takes A Sharp Dip
With so much speculation floating around on the internet regarding the bitcoin ETF, one would almost forget other things are taking place as well. For example, the PBoC has not given up on their “crackdown” against bitcoin exchanges, In fact, it appears they will create a list of addresses where exchanges can no longer send money to due to anti-money laundering restrictions
Then again, it appears as if the PBoC wants to create a “blacklist” of specific bitcoin addresses. While that sounds scary, it is not a negative development by any means. Users can generate as many bitcoin addresses as they like without repercussions. This renders the whole ordeal a bit moot, although it seems to have spooked quite a few bitcoin holders for some unknown reason. Then again, expert traders had been warning about a potential retrace for some time now.
At the same time, it appears liquidity on various exchanges has facilitated this dump as well. GDAX, Coinbase, and Gemini saw very little volume when the dump occurred, pushing the bitcoin price to around the US$1190 mark. With little volume on the order books, there is no one to catch the proverbial falling knife. Without a buffer to soak these panic sells, the price took a big hit, although it may only be a temporary setback.
Some people were speculating the SEC decided to reject the bitcoin ETF listing, but no word has been received from the governmental body just yet. Many traders speculate the rejection of the ETF will send the bitcoin price plummeting, although it is a bit unclear why this would have such an effect. An ETF will bring “dumb money” into the “smart” financial ecosystem at a quicker pace. However, money will pour into bitcoin sooner or later, regardless of an ETF or any “traditional” trading vehicle.
In the end, the bitcoin price will always go through highs and lows. Although validity has become less of an issue for bitcoin as of late, the price will continue to shift on a regular basis. With margin trading removed from Chinese exchanges, more stability has been created. We can only hope to see all other centralized trading platforms remove leveraged margin trading for the bitcoin price as well.
By the look of things, the bitcoin price has already begun its recovery process. Rest assured there will still be some volatility over the coming hours until proper buy support can be established once again. This recent bitcoin price drop caught a lot of people by surprise, but it seems there is a lot of panic for no good reason. Regulatory decisions in China never impact bitcoin itself, but only the centralized companies acting as a gateway to the cryptocurrency ecosystem.
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