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China crypto news pushes market down to critical support

2021.09.24 Adam James

Another round of negative news out of China has pushed the cryptocurrency market back down to key levels of support.

The cryptocurrency market is down roughly 5% overall today — with market leaders BTC and ETH seeing declines of 5.7% and 8.6%, respectively, over the past 24 hours. Popular altcoins XRP, SOL, DOGE and LINK are all down by more than 8%, with Uniswap's UNI down nearly 11%.

The cryptocurrency market is a sea of red today. Source: Coin360

The obvious cause of the cryptocurrency market's troubles is the People's Bank of China's announcement that all fiat-to-crypto or crypto-to-crypto transactions are considered illegal activities.

Though the news appears fresh, it is well in line with China's continued and long-running crackdown on crypto — leading many industry pundits to call the news little more than yet another piece of China-ban-Bitcoin FUD (short for fear, uncertainty and doubt). 

Some in the industry are also claiming that the news isn't even new but rather a recycled announcement from earlier this month meant to manipulate the market.

NFT Snapshot: TIMEpiece launch apparently botted

Yesterday's highest-profile nonfungible token launch was largely seen as a disappointment after Time magazine's collection of 4,676 NFTs — which provide the holder with a lifetime membership to Time.com and other bonuses — sold out in one minute to only 700 addresses. 

During that time, transaction fees reached nearly 10,000 gwei — indicative of bot activity.

Top altcoin gainers and losers: WAVES leads large-caps

  • REN/USDT +15.39%
  • YGG/USDT +15.20%
  • WAVES/USDT +5.34%
  • SWRV/USDT -17.81%
  • PPT/USDT -20.88%
  • CTC/USDT -29.51%

The top-performing altcoin with a market capitalization greater than $1 billion on OKEx today is WAVES, which is third-place overall — per the exchange's default time settings — after gaining a modest 5.34%. AXS is the only other large-cap altcoin seeing gains after adding less than 2%.

WAVES is the top-performing large-cap altcoin on OKEx today. Source: OKEx

BTC technical analysis: Bouncing off of critical support

After selling off immediately following the news out of China, the price of BTC bounced from its area of critical support around 41,000 USDT. Losing this area of support would be bearish and open the door to a collapse toward 34,000 USDT.

OKEx's BTC/USDT 4h chart — 9/24. Source: OKEx, TradingView

ETH technical analysis: Also bouncing off of critical support

Like BTC, the price of ETH against the market-leading cryptocurrency has bounced off of key support around 0.067 BTC. Bulls will be keen on ETH breaking above the extended downtrend line before attempting to push through the horizontal extended resistance line.

OKEx's ETH/BTC 4h chart — 9/24. Source: OKEx, TradingView

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.