The Bitcoin price came under selling pressure again in the late afternoon of May 21, 2021. New news from China underscores the government’s intention to crack down on cryptocurrencies and put BTC mining to the test. Will the new China FUD lead to another crash?
At times, the Bitcoin price fell again by 14% on May 21, 2021. The background to the renewed volatility are headlines from China, which suggest a tougher position against cryptocurrencies and BTC mining. However, this time, the sources are government-related institutions and the Deputy Prime Minister of the State Council Liu He himself.
The price of BTC reacted with volatility to this again negative news. At the time of this writing, Bitcoin was trading at $37,495 while the daily high was at $42,200. Is it going down again to the last marked low at $30,000?
China wants to put Bitcoin mining to the test in its own country
The so-called China FUD is not ending. And Beijing seems to like the bull market in the Bitcoin price again and again. According to Chinese sources, state Councillor Liu He said that China is “determined to control and prevent financial risks” when it comes to cryptocurrencies. In addition, Bitcoin mining is to be put to the test.
This attitude from China is not necessarily new. But the testimony of a deputy prime minister weighs more heavily here than the testimony of last Wednesday. Government-related institutions warned against offering financial services around cryptocurrencies. However, the reference to BTC mining and the climate targets in the Far East is something completely different. Namely even more explosive for the environmental debate, warmed up by Tesla CEO Elon Musk.
Bitcoin price collapses by more than 14% at times
The environmental debate should not be the issue here and now. Rather, it is about an emotional market that now has to digest negative news again. As mentioned by the daily high, the Bitcoin price slid to about $42,000 temporarily by over 14% in depth. $36,100 was the previous day’s low. Source: Tradingview
Failure to break through at $40,000 to 42,000 will swing the scepter back towards the sellers in the market for the time being. Driven by the news, sales are picking up speed and will be stopped at a support zone at around $36,670 for the time being. A determined backlash to over $38,000 would send a strong signal here.
If $36,670 should be broken through bearishly, the next price targets could be sought at around $34,350 and 32,250. A daily closing above $38,150, on the other hand, would probably cause the balance of power to swing back in the direction of the buyer.
China FUD nothing (completely) new for cryptocurrencies
The reports from China are sometimes just (more) words. We know Beijing’s attitude towards cryptocurrencies well. The Bitcoin Mining thing would also have to go through several decision-making bodies. Whether this is considered likely cannot be conclusively assessed without further information.