FX.co ★ Bitcoin analysis for 21/05/2018

Another cryptocurrency project in China was interrupted by law enforcement agencies. According to financial media, the police in Shenzhen arrested six people who allegedly robbed 3,000 Chinese investors of $ 47 million, selling a cryptocurrency, which they claimed to be backed by commodities.

Six suspects formed a company based in Shenzhen called PEB, which from January 2017 issued a token powered by Blockchain, named Pu'er Coin. The website of the project says that the buyer of the token is entitled to have a contract owned by a certain amount of Tibetan Pu'er tea, which the company has in stores, and which it considers worth billions of dollars. While the token can then be exchanged in the aftermarket called Jubi.com, another website claims that the contract may yield an annual return of 12 percent if investors choose to block their funds for 12 months. The police investigation showed that despite the fact that the company had only a "very limited amount of tea in stock", it promised high short-term profits to investors in promotional campaigns on social media and traveling advertising campaigns in luxury hotels. The police also say that the project has managed to attract a significant number of investors by manipulating the secondary market using its own means to raise the price of tokens twenty times during 2017. At the end of last month, the company received a warning and a fine from the Chinese state administration for market regulation, whose task is to ensure fair and fair market competition. The authorities imposed a fine of $ 20 million on the company for spreading false information in the ad that touted allegedly large Tibetan tea stocks that supported the token.

The arrest is another notable sanction regarding alleged cryptocurrency fraud in China, as the authorities in this country have increased their efforts to combat illegal fundraising.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market has managed to break out above the golden trend line and made a local high at the level of $8,505, just above the weekly pivot at the level of $8,446. The corrective cycle in wave 2/B might have been completed as well, but as long as the price will not break through the high of the wave X at the level of $8,900, the recent upward development might be still treated as the alt:b wave. The situation is still not 100% clear who is in control of the market, so it is better to wait for the important levels to be tested first.