The current technical picture is not in bitcoin's favor
The decline comes amid renewed active measures of the Chinese leadership to combat illegal mining and trading. In addition, last week the Federal Reserve announced its intention to raise interest rates as early as 2023, which increased bearish pressure on the market.
The cryptocurrency's latest drop began in mid-June amid news that authorities in China's Sichuan province, a major center for cryptocurrency mining, had banned mining. The decision was part of China's nationwide policy to curtail cryptocurrency mining in the country, RBC writes.
On Monday, China's Central Bank held a meeting with representatives of the country's largest banks. The regulator banned them, as well as the Alipay payment system, from participating in transactions with cryptocurrencies and ordered to prevent such activities in every possible way.
CryptoQuant CEO Ki Young Ju emphasized that bitcoin has moved into a bear market and big players are engaging in aggressive selling. The capitulation index of "whales" turned positive: this indicates that investors are not only sending coins to trading floors, but also increasing sales, which leads to more pressure on the market.
Jim Cramer, a former hedge fund manager at Cramer & Co and host of CNBC's Mad Money show, sold most of his bitcoins after news of China's restrictions on mining. Cramer said there are structural problems with digital gold and predicted a further decline in its price.
"The market fell by 15% while MicroStrategy invested another $500 million. Retail investors left. Traders experienced too many mass liquidations. Issuance stopped. There is no one left to buy your coins," one trader tweeted.
The current technical picture is not in bitcoin's favor. If BTC fails to hold the support at $29,000, the next zone of strong support is expected at $23,400, experts believe.