China gives a new impulse to cryptocurrencies.
At the end of last week, bitcoin showed a record daily growth. BTC quotes soared on 40% from $7500 to almost $10500. The last time a similar price surge was recorded in 2015. It was not possible to stay above the psychological level of $10000, nevertheless, a bullish impulse was able to break through the downtrend line (red line), in which BTCUSD has been traded since the end of June. Then the correction began , which now took the form of a downward price channel. Together, it forms a flag - a figure of the trend continuation.
In the short term, with a high probability, it can be assumed a return to a key level of $10000. The main trading volume has been concentrated here lately and most likely that main confrontation between buyers and sellers will unfold in this area. Given the breakthrough of the trend line and formed flag, which serves as a retest, bullish scenario looks quite convincing. In this case, local target for buyers will be at the level of $12000, where large trading volume ends (according to the volume profile indicator) and it will be possible to fix profit without any problems.
According to most cryptanalysts, impulse growth of 40% was due to a fundamental factor, namely the speech of Xi Jinping in which he stated that China should become a leader in the field of blockchain. Chinese crypto-oriented companies have sharply risen in price, search queries according to the words “blockchain” and “bitcoin” have multiplied. It is worth clarifying that the speech focused on the blockchain technology itself, and not on cryptocurrency trading, which has been officially banned since 2017. Nevertheless, this is an important step for the development and implementation of distributed registry technology, necessary for mass adoption.
China has already begun to compete with the Western world, and especially the United States in the field of copyright and patents for new technologies. This will allow the country to make large profits in the manufacture of export goods and be less dependent on foreign technologies in general. So the development of the blockchain will become strategically important for China.
The Guangzhou government has already announced the allocation of 1 billion yuan to subsidize such projects, and this is only the beginning. It is believed that the People's Bank of China will be the first in the world to launch a national digital currency. This is not without meaning, because at the moment, the main yuan liquidity is provided by American SWIFT system.
Such fundamental events are able to reverse medium and long term trend. Speculative moments, such as endless ETF permission transfers, launch of Bakkt and cryptocurrency options no longer have the same impact on the market as before. Distributed registry technology needs to be developed; it is still far from perfect. And it seems that China is planning to take a major role in this process.
In the short term, with a high probability, it can be assumed a return to a key level of $10000. The main trading volume has been concentrated here lately and most likely that main confrontation between buyers and sellers will unfold in this area. Given the breakthrough of the trend line and formed flag, which serves as a retest, bullish scenario looks quite convincing. In this case, local target for buyers will be at the level of $12000, where large trading volume ends (according to the volume profile indicator) and it will be possible to fix profit without any problems.
According to most cryptanalysts, impulse growth of 40% was due to a fundamental factor, namely the speech of Xi Jinping in which he stated that China should become a leader in the field of blockchain. Chinese crypto-oriented companies have sharply risen in price, search queries according to the words “blockchain” and “bitcoin” have multiplied. It is worth clarifying that the speech focused on the blockchain technology itself, and not on cryptocurrency trading, which has been officially banned since 2017. Nevertheless, this is an important step for the development and implementation of distributed registry technology, necessary for mass adoption.
China has already begun to compete with the Western world, and especially the United States in the field of copyright and patents for new technologies. This will allow the country to make large profits in the manufacture of export goods and be less dependent on foreign technologies in general. So the development of the blockchain will become strategically important for China.
The Guangzhou government has already announced the allocation of 1 billion yuan to subsidize such projects, and this is only the beginning. It is believed that the People's Bank of China will be the first in the world to launch a national digital currency. This is not without meaning, because at the moment, the main yuan liquidity is provided by American SWIFT system.
Such fundamental events are able to reverse medium and long term trend. Speculative moments, such as endless ETF permission transfers, launch of Bakkt and cryptocurrency options no longer have the same impact on the market as before. Distributed registry technology needs to be developed; it is still far from perfect. And it seems that China is planning to take a major role in this process.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.