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This Week In Bitcoin: China Crackdown; Prices Back On The Climb
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This Week In Bitcoin: China Crackdown; Prices Back On The Climb

Bitcoin has experienced no shortage of news and announcements, as the seminal cryptocurrency attempts to mount a recovery following May’s rout and June’s outperformance over other major coins.

The Fundamental Look

Ahead of the 100th anniversary of China’s Communist Party, the government is continuing its crackdown on Bitcoin usage in the country. On Tuesday, July 6th, the People’s Bank of China warned local companies against providing any support or services to cryptocurrency-related services, this time focusing its attention on software provision.

Some perceive the clampdown as an effort to prevent any embarrassing events from overshadowing the forthcoming anniversary and possibly fighting capital flight. Nonetheless, the clampdown might continue to pressure BTC prices over the near term. (See Bitcoin stock comparison on TipRanks)

One of the most interesting outcomes from the exodus of miners from China was the major 28% downward mining difficulty adjustment on July 3rd. While the network hash rate fell to its lowest point since September of 2019, operational miners likely experienced a significant jump in profitability. That’s because the adjustment made mining easier.

In adoption news, payment services provider Allied Payment Network has embraced Bitcoin after partnering with New York Digital Investment Group. The provider will now offer Bitcoin payment services to its network of customers and clients, meaning that connected financial institutions can now offer their customers the ability to buy, hold, and sell Bitcoin. Moreover, Allied has announced its intention to add Bitcoin to its corporate treasury account.

The other major event worth mentioning is the passing of Mircea Popescu, a famed Bitcoin agitator and maximalist known by the moniker “the Father of Bitcoin toxicity.” Popescu reportedly drowned off the coast of Costa Rica. The mysterious individual once threatened to dump a million Bitcoin on the market if proposed changes were made to the network, earning him the previously mentioned moniker. However, if true, there are concerns that his Bitcoin holdings may hit the market or be lost forever.

Whales of the Week

A whale is a term used in cryptocurrency to describe a person or entity that maintains a large amount of bitcoin. Whales’ movements can possibly manipulate valuations of bitcoin. Here are some of last week’s movements of large amounts of bitcoin:

● July 1: 6000.000 BTC moved from unknown wallet to Bitstamp

● July 2: 2217.600 BTC moved from multiple wallets to OKEx

● July 2: 2772.087 BTC moved between unknown wallets

● July 5: 2123.964 BTC moved between unknown wallets

● July 5: 3394.681 BTC moved between unknown wallets

● July 6: 2098.092 BTC moved between unknown wallets

The Technical Take

Between July 1st and July 7th, Bitcoin performance against the U.S. dollar was positive, ending up 3.95% while underperforming Cardano (+6.66%) and Ethereum (+12.23%) over the same period.

Although the trend in price is broadly upwards short-term, near-term BTC resistance is sitting at $35,000 and $36,000. On the downside, support is around $33,700 and $32,700. Also, BTC/USD is undergoing a price consolidation dating from mid-June, with an emerging technical symmetrical triangle potentially signaling a directional breakout ahead.

Falling Bitcoin transaction volumes correspond with this emerging technical setup, suggesting an increased likelihood of a strong directional breakout. After July 3rd, average daily Bitcoin volume fell fairly precipitously, tumbling from levels in the mid-to-high $30 billion in 24-hour to turnover to the mid-to-high $20 billion range towards the latter half of the week, meaning the latest gains are coming on the heels of falling volume.

Disclosure: Reuben Jackson held no position in any of the stocks mentioned in this article at the time of publication.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

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