FX.co ★ China will continue to "tighten the screws" for the cryptocurrency sphere

Recently, only negative news for bitcoin has been coming from China. Recall that it all started with several accidents at coal mines in China, which led to interruptions in the supply of electricity in the Xinjiang region and led to the shutdown of about 30% of China's mining farms. After that, similar problems followed in another region of China - Sichuan. Well, in the end, the cherry on the cake is the information that financial institutions in China will be prohibited from providing any services related to cryptocurrencies, and a little later - information that mining may be completely banned in the country.

According to some experts, China will be the first of the largest states in the world to really "tighten the screws" in relation to the cryptocurrency sector properly. The Chinese Communist Party wants to completely control all sectors of its economy, and, as we said earlier, bitcoin and other cryptocurrencies are just very difficult to control without the corresponding new legislation. It is very important for the Chinese government that the yuan and the banking system are stable. This, in turn, is necessary to demonstrate that the Communist Party has everything under control.

Even though no precise instructions and laws have yet been adopted, many Chinese mining pools have already begun to scale back their activities and move equipment to other countries. Experts expect that government regulation of the cryptocurrency sphere will only get tougher, so they urge to prepare for the worst-case scenario.

Meanwhile, it was calculated what losses bitcoin traders suffered from May 17 to 23, when the first cryptocurrency plummeted by $13,000. The volume of unprofitable positions amounted to $14.2 billion. Experts made rough estimates and concluded that about 24% of wallets at this time are unprofitable since coins were purchased on them at a rate higher than the current one. Experts also believe that there is a fairly large number of participants on the market who may resume sales soon. These are all the same miners in China, investors who have doubts about the restoration of the "bullish" trend and "unprofitable wallets".

Thus, so far, everything is shaping up in the worst way for bitcoin. Recall that even a fall in bitcoin cannot happen in a couple of months. If we assume that a downward trend has now begun, then it can take from 2 to 3 years. Accordingly, a rather protracted fall of the first cryptocurrency, and with it, the entire cryptocurrency market, awaits us, because bitcoin continues to drag everyone down with it, then acts as a growth driver for many cryptocurrencies.