Latest Chinese Crypto Warning Sent Bitcoin Towards $38,500

Bitcoin fell below the psychologically significant $40,000 mark on Wednesday morning, May 19, amid news of new cryptocurrency bans in China.

May 19, 2021, | AtoZ Markets – In a matter of hours, Bitcoin fell by more than $40,000 and tested at least $38,500. This is the lowest price since the beginning of February. Over the course of a day, the premier cryptocurrency lost 12%, and over a week - more than 30%. At the time of writing, BTC/USD is trading at $40,406.

BTC/USD 1-Hour chart. Source: TradingView

All digital coins from the top ten are also in deep minus. The cryptocurrency market has lost more than $3 billion over the past 24 hours: the total capitalization sank from $2.16 trillion to $1.8 trillion.

New Chinese crypto ban

China is tightening the screws again. The People's Bank of China issued a statement stating that digital tokens cannot be used to pay for goods and services. Moreover, financial and payment services are prohibited from specifying prices in cryptocurrencies. This was reported in the official WeChat account of the Central Bank.

However, according to Yu Lingqiu, deputy director of the China Development Institute think tank in Shenzhen, the statement does not contain any specific regulatory steps. Moreover, it was compiled by industry organizations, and not by the Central Bank itself, so its significance is not so great.
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Earlier, it was reported that three self-regulatory organizations of the country signed an agreement to ban crypto -business.

This is just a warning. The authorities feel that the market is overheated, there is too much speculation, so they are thinking about how to protect the interests of the people,” added Bobby Lee, founder and CEO of cryptocurrency storage solutions provider Ballet.

According to the latest Bank of America poll, “buying bitcoin” is now the most popular transaction in the world. According to Matt Mali, chief market strategist at Miller Tabak + Co, such a bias often suggests that a correction is imminent in the market.

Add news from China here, and the fall in bitcoin no longer seems surprising,” the expert noted.

Correction took away almost $2 billion

According to the analytical service, positions worth $2 billion were liquidated in the market over the past day, while $1 billion was liquidated in the last 4 hours. Bitcoin became the leader of the sale. It accounted for almost $900 million of the total liquidations. ETH is in second place with liquidations in the amount of more than $400 million. It closes the top three XRP leaders  - $117 million. data

About 27% of all liquidations occurred on the Bybit cryptocurrency exchange. Another 26% happened on Huobi and about 18% on Binance.

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