Bitcoin – China Tightens the Noose on the Crypto Bulls

Bitcoin slipped by 0.52% on Sunday, reversing Saturday’s 0.58% gain, to end the week up 3.29% to $6,698.3, the Bitcoin bulls locking in a 2^nd consecutive week of gains.

A morning saw Bitcoin slide from a start of a day intraday high $6,789 to an early intraday low $6,557, the early moves seeing Bitcoin fall through the first major support level at $6,668.1 and the second major support level at $6,604.2 before finding support to move back through to $6,600 levels.

The pullback saw Bitcoin yet again fail to break out from the 23.6% FIB Retracement Level of $6,757 that has continued to pin Bitcoin back from any recovery to $7,000 levels, last struck on 8^th August.

A late morning recovery saw Bitcoin move back through to $6,700 levels and an afternoon high $6,745.4 before easing back to $6,600 levels, selling pressure at the 23.6% FIB Retracement Level too great for the Bitcoin bulls at the end of the weekend.

Sunday’s early reversal coincided with news hitting the wires of the Chinese government getting more heavy handed in its fight against the cryptomarket, reaffirming its ban on ICO and cryptocurrency related activity in the country and banning a number of cryptomarket related accounts on WeChat.

With WeChat closing a number of crypto related sites, the debate ongoing on whether the shutting down of the accounts was in relation to crypto-related activity, the Chinese government is planning to block access to more than 100 foreign crypto exchanges by being included their sites under the government’s list of banned overseas sites, preventing the Chinese population from gaining access.

The Chinese government’s list of banned crypto related activities is getting ever longer, with merchants banned from accepting cryptocurrencies and crypto-related media news portals also being shut down.

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At the time of writing, Bitcoin was down 0.03% to $6,705.1 in what’s been a relatively choppy start to the week.

Tracking the broader market, Bitcoin pulled back to an early morning low $6,652.7 before recovering to $6,700 levels, with a morning high $6,727.4, the moves through the start of the week leaving the day’s major support and resistance levels untested early.

Of greater significance was Bitcoin’s struggles at around the 23.6% FIB Retracement Level of $6,757 that likely contributed to Bitcoin’s trend bucking move into negative territory early on, the majority of the majors enjoying a positive start to the week.

For the day ahead, a move back through the morning high $6,727.4 would support a run at the 23.6% FIB Retracement Level of $6,757, with a broad based market rally needed to support a break out to $6,800 levels to bring the day’s first major resistance level at $6,805.87 into play.

Failure to move back through the morning high could see Bitcoin pullback through the morning low $6,652.7 to bring sub-$6,600 levels and the day’s first major support level at $6,573.87 into play before any recovery.

The recovery from an early dip supports another run at the 23.6% FIB Retracement Level of $6,757, while we will expect Bitcoin to face plenty of resistance at $6,800 in the event of a move later in the morning.