Once again, China is causing devastating Bitcoin news. In Sichuan province, long considered a mining stronghold, the authorities now literally pulled the plug. 26 Mining farms were closed by order of the government. “The Chinese government is obviously now pulling the plug on the domestic mining business,” analyst Timo Emden of Emden Research told NTV. “Many companies could migrate abroad.“
BTC under the Death Cross
The Bitcoin price reacted in panic. Currently, a BTC costs only 32,500 USD. How t-online.de reported, the digital token is now also struck from a chart-technical point of view. So, due to recent losses, he fell under the so-called Death Cross. This indicator says that the average price over the past 50 days has fallen below the 200-day line, thus triggering a technical sell signal.
Most recently, the Bitcoin price had to cope with such a constellation in 2020 when it dropped from 9000 € in a short time to a value of 4300€. And both technical indicators and the current BTC news situation are strongly on Sell. The AFP news agency writes about the worrying news from China: “They have closed everything down”. Whether this will also apply to the large number of digital tokens in the longer term is unclear. In the wake of the recent losses of the largest cryptocurrency, numerous altcoins such as Ethereum or Litecoin were also carried away.
Investors could take advantage of the market situation via short positions
Resourceful investors could exploit the market situation for new short positions. Derivatives such as CFDs can also be used to generate returns from falling prices. However, a look into the past shows that you can incur immense risks if crypto prices unexpectedly skyrocket again. Everything seems conceivable in the current market of digital currencies.
The investment in one of our selected Bitcoin alternatives, which partly counteract the principle of mining with other technological approaches, may also help.
Photo by Roman Kraft
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