BITCOIN CONTINUES TO STRUGGLE AS CHINA MOVES TO BAN MINING
On Sunday, the price of bitcoin continued to slide after Bloomberg reported of a planned crackdown on miners. According to the report, Chinese authorities were planning to phase out gradually mining operations in the country.
This news is significant because China is home to some of the biggest bitcoin miners in the world. This is because of its low energy prices and accessible mining technology.
According to Bloomberg, many bitcoin mining companies were trying to relocate their operations to other countries. Russia has been receptive to them.
If bitcoin were a commodity, the news from China would have been bullish because of reduced supply and increased demand. However, bitcoin is unique because the relocation of miners would make mining expensive and thus go against the role of bitcoin as a cheaper currency.
In the chart below, we can see that bitcoin started a bullish trend on Thursday, moving from a low of $14,194 and reached a high of $17,190 where it formed a double top. It then started moving lower, forming a perfect Elliot Wave pattern, which ended yesterday. It then started to form a reversal Elliot Wave. We expect its price to touch the $15,600, which happens to be a significant resistance zone and a 50% retracement level.