Bitcoin Bear Market: BTC Transfer To Spot Exchanges At ATH, China Continues Crackdown On Crypto
By: Naga Avan-Nomayo
Tags: Cryptocurrency, China, Bitcoin Mining, Bitcoin, Crypto

Bitcoin Bear Market: BTC Transfer To Spot Exchanges At ATH, China Continues Crackdown On Crypto Naga Avan-Nomayo Jun 22·3 min read

Investors push bitcoin transfers between external wallets and spot exchanges to an all-time high (ATH) as China continues to crack down on crypto. Miners forced to move to more favourable locations. The FUD continues.

Bitcoin Facing Bear Market

The bearish indicators continue to show face as the entire crypto market suffers an aggressive pullback yet again. According to a research report from CryptoQaunt on June 19th, 2020, a significant number of traders and investors have deposited large holdings of Bitcoin (BTC) into spot exchanges. An excerpt from the report reads:

“Yesterday we saw the highest daily spike in BTC Inflow Mean to Spot Exchanges since the March 2020 crash. Also, a 7 day moving average of spot exchange net flows just turned significantly positive for the first time since the distribution in the 50k range.”

BTC is currently trading at $29,952. The last time the market saw the number one crypto at these levels was back in January 2021. Considering the bullish momentum built between January-April 2021 and Bitcoin hitting an ATH of $65,000 in mid-April, hardly anyone predicted a retracement of this magnitude.

BEARISH MOMENTUM BUILDS

BTC seemed unstoppable as Tesla, a modern-day electric car maker, announced its decision to add crypto to the company’s balance sheet in February 2021. Tesla also added Bitcoin as a payment option and went on to purchase a staggering $1.5 Billion worth of BTC. This move encouraged community sentiment and aided the bullish momentum.

Everything changed in May beginning with news from China as PBOC expressed concerns over crypto activities in the country. The Central Bank of China claimed BTC and other cryptocurrencies posed a threat to the normalized economic flow.

In the following weeks, Tesla announced a halt in Bitcoin payments via a tweet from Billionaire CEO Elon Musk citing inefficiencies in Bitcoin’s energy consumption. The FUD went on for days, fueling doubts and initiating BTC pullbacks to the $30,000 region

Exciting reports from El Salvador promised to restore bullish momentum as we saw BTC regain about $10,000 of its value. However, continuous FUD from China and persistent resistance around the $42,000 region for Bitcoin proved too strong.

As reported by CryptoPotato, the 50-day moving average (MA) crossed below the 200 days MA, signalling a death cross for BTC, and initiating another pullback in the market. Furthermore, China continued its crackdown on crypto-related activities as PBOC ordered five major banks in the country to cease offering financial services to crypto businesses.

In addition, a major cryptocurrency mining pool known as BTC.com announced its move to Kazakhstan following concerns from Wuhan regarding the mining industry’s carbon emissions. The mining pool operated by BIT Mining and owned by NYSE-listed Chinese lottery service provider 500.com release a statement saying:

“On June 19, 2021, the Company’s indirectly held subsidiary, Ganzi Changhe Hydropower Consumption Service Co. Ltd […] received notice […] from State Grid Sichuan Ganzi Electric Power Co., Ltd. […] informing Ganzi Changhe Data Center, that its power supply would be suspended, effective 9:00 pm Beijing time, June 19, 2021. Ganzi Changhe Data Center has since suspended its operations. Data centers in Sichuan, including the Ganzi Changhe Data Center, contributed approximately 3% of the Company’s total revenues in the month of May 2021.”

As of the time of this report, BTC.com is the world’s fifth-largest mining pool and Is responsible for validating 10.4% of blocks on the Bitcoin blockchain.

With FUD surrounding Bitcoin and China’s unrelenting crackdown on crypto, the market continues to show bearish indicators. At the time of writing this report, the total cryptocurrency market cap dropped some 5% over the last 24 hours.

However, history has shown that Bitcoin and crypto possess remarkable endurance. We can expect a recovery sometime in the near future but we can predict when exactly. Until we know which way the market is clearly moving, trade wisely and maintain diamond hands.