Why the downtrend of cryptocurrencies may end on New Year’s Eve


Should the Chinese ban be blamed on the recent Bitcoin sell-off that caused the entire crypto market to fall? This is a popular theory. With major exchanges shutting down their business in mainland China, citizens have been afraid of selling their assets. They don’t know if they will be able to trade or even sell their cryptocurrency in the future, so they want to return to the yuan. We have graphs and carrots from Arcane Research to prove this.

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Let’s stop wasting time and move on to hard data.

How does China’s ban treat Huobi?

Headlines, Provided by this carrot,as follows. “Huobi, the largest exchange in Asia, has stopped trading in China. Bitcoin has been flowing from Asia to the United States and Europe for some time.” To elaborate on this point, we invited good friends at the Arcane Research Center Weekly update“Starting in September, the ultimate impact of China’s Bitcoin ban is showing. After the gradual removal of mainland Chinese users, Huobi’s share of global open positions has dropped from its peak of 20% on February 15, 2020. To 2%.”

They have diagrams to prove this:

BTC Futures Open Interest, OKEx and Huobi | Source: The Weekly Update

Even more data and key dates:

“Huobi has accelerated the retirement of mainland Chinese customers. On September 24, Huobi suspended the registration of new customers in mainland China. On December 15, Huobi suspended spot transactions with Chinese citizens. In addition, from December 15 As of December 31, mainland Chinese customers can only sell digital assets.”

Therefore, the downward trend of cryptocurrencies may end on New Year’s Eve, because this is the last day that Huobi’s “mainland Chinese customers” can sell. This may sound a bit exaggerated, but look at this bloody red chart:

“The selling pressure from China is real,” and it’s not just from Huobi.

How does the Chinese ban treat OKEx?

The situation of the other Chinese giant is more complicated. What happened inside? How did they deal with the Chinese ban? Rumors spread.according to Give carrots, “OK Exchange has not yet issued a liquidation announcement.” The weekly update has more information, but it is still puzzling.

“OKEx’s public statement is much more vague than Huobi’s. The exchange publicly stated that mainland Chinese traders will not be able to access the exchange’s website. In addition, the exchange has stated that it will not establish offices and teams in mainland China. Maintain the policy of “exit the Chinese mainland market.” In OKEx’s subreddit, the OKEx service desk shared a screenshot of its P2P market, and traders are currently allowed to trade in RMB.”

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As shown in the first chart, the share of OKEx holdings is also falling sharply. “In April 2020, OKEx accounted for 30% of the open interest in the futures market, which is in sharp contrast to today’s 8% market share.” The signal is clear, even if this is not the case.

12/22/2021 BTCUSD price chart-TradingView

BTC price chart for 12/22/2021 on Coinbase | Source: BTC/USD on TradingView.com

What about Binance?

Unfortunately, we don’t have so much data about them. Carrot claims that “Binance will be partially liquidated at the end of this year.” It also tells us that “Binance’s net position has recently turned red (probably because of China)” and provided us with two very useful charts. Among them, the selling pressure caused by China’s ban is obvious. Although Binance is red, Kraken, which is centered on the United States and Europe, is green.

So, will the downward trend of cryptocurrencies end on New Year’s Eve? The data speaks for itself. Nevertheless, let’s cross our fingers.

Featured Image: Myriams on Pixabay | Charts by TradingView


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