The crypto-market has been sliding for the past week, starting last Wednesday with Elon Musk's tweet declaring that Tesla (TSLA) would no longer be accepting bitcoin as payment to China's fresh crackdown on cryptos yesterday, leading to capitulation. Three Chinese financial institutions announced that banks and payment companies would not be allowed to conduct business related to cryptocurrencies, reiterating the 2017 crypto ban. Chinese crypto traders had been able to get around this ban for some time by utilizing exchanges located outside of China's borders like Binance. This reiterated ruling could make it much more difficult to buy digital currencies or exchange them back to Yuan.
Bitcoin blew through many of my support levels yesterday but bounced off $30k, representing a 50% decline from just a week and a half ago. Ethereum (or Ether), which has been the recent crypto outperformer (and my favorite blockchain asset because of its utilization beyond a currency), dropped off a 40% cliff yesterday at its low in the morning but bounced hard at an $1850 support.
Bitcoin lost 30% of its value in hours yesterday morning but managed a swift recovery to single-digit losses as traders began to rapidly buy the discounted benchmark crypto, and traded even higher today. $40K appeared to be a resistance level for Bitcoin (right around its 200-day moving average) yesterday, but we are trading above that today. Bitcoin was beginning to get the institutional seal of approval, but that has been hindered by the unprecedented level of volatility we saw from this digital asset yesterday.
There is a significant amount of leverage in the cryptocurrency market, as illustrated by the speed at which these digital assets moved yesterday. This leverage explains the broader market sell-off as the margin calls that many bullish traders are getting hit with are forcing them to sell across-the-board equities for liquidity.
China's Fresh Crackdown
In 2017, the People's Bank of China banned the use of cryptocurrencies in their financial institutions, indicating they cannot accept cryptos as a means of payment or settlement. Chinese institutions will not be allowed to provide exchange services for digital currencies (except, of course, their own) and will not offer any crypto-related financial products. Now China is making further efforts to rid their country of these digital assets that have "no real value" and are "extremely easy" to manipulate.
China doesn't want to see an asset that they don't control or track to become the currency of the realm. The country recently released a digital Yuan, which allows the country to track every transaction from every user on this centralized blockchain, controlled by the government. China wants to ensure that they are not taken out of the currency loop. Some are saying this new crypto-Yuan is the biggest threat to the West.
The digital Yuan completely goes against the decentralized essence of cryptocurrencies, which made the asset class so popular to begin with.
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What To Make Of The Crypto Capitulation
The crypto-market has been sliding for the past week, starting last Wednesday with Elon Musk's tweet declaring that Tesla (TSLA) would no longer be accepting bitcoin as payment to China's fresh crackdown on cryptos yesterday, leading to capitulation. Three Chinese financial institutions announced that banks and payment companies would not be allowed to conduct business related to cryptocurrencies, reiterating the 2017 crypto ban. Chinese crypto traders had been able to get around this ban for some time by utilizing exchanges located outside of China's borders like Binance. This reiterated ruling could make it much more difficult to buy digital currencies or exchange them back to Yuan.
Bitcoin blew through many of my support levels yesterday but bounced off $30k, representing a 50% decline from just a week and a half ago. Ethereum (or Ether), which has been the recent crypto outperformer (and my favorite blockchain asset because of its utilization beyond a currency), dropped off a 40% cliff yesterday at its low in the morning but bounced hard at an $1850 support.
Bitcoin lost 30% of its value in hours yesterday morning but managed a swift recovery to single-digit losses as traders began to rapidly buy the discounted benchmark crypto, and traded even higher today. $40K appeared to be a resistance level for Bitcoin (right around its 200-day moving average) yesterday, but we are trading above that today. Bitcoin was beginning to get the institutional seal of approval, but that has been hindered by the unprecedented level of volatility we saw from this digital asset yesterday.
There is a significant amount of leverage in the cryptocurrency market, as illustrated by the speed at which these digital assets moved yesterday. This leverage explains the broader market sell-off as the margin calls that many bullish traders are getting hit with are forcing them to sell across-the-board equities for liquidity.
China's Fresh Crackdown
In 2017, the People's Bank of China banned the use of cryptocurrencies in their financial institutions, indicating they cannot accept cryptos as a means of payment or settlement. Chinese institutions will not be allowed to provide exchange services for digital currencies (except, of course, their own) and will not offer any crypto-related financial products. Now China is making further efforts to rid their country of these digital assets that have "no real value" and are "extremely easy" to manipulate.
China doesn't want to see an asset that they don't control or track to become the currency of the realm. The country recently released a digital Yuan, which allows the country to track every transaction from every user on this centralized blockchain, controlled by the government. China wants to ensure that they are not taken out of the currency loop. Some are saying this new crypto-Yuan is the biggest threat to the West.
The digital Yuan completely goes against the decentralized essence of cryptocurrencies, which made the asset class so popular to begin with.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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