Bitcoin prices suffered heavy losses on Friday after Caixin, a local outlet, reported that Chinese regulators were planning to order a blockage to all virtual currency trading platforms. Bitcoin lost more than $200 in a quick manner, pushing the BTC/USD pair to a fresh 3-day low at $4220. Following a modest recovery after the initial reaction, the pair is now trading at $4354, losing 5.6% on the day.
Citing a source close to the central government’s office overseeing internet financial risks, Caixin claimed that the office has ordered local authorities to shut down virtual exchanges, including OKCoin, Huobi and BTC China, trading digital currencies with the yuan. “It means platforms facilitating trading between virtual currencies and legal tenders will not be allowed in China,” the source said, according to Caixin.
This development came after Chinese regulators announced a ban on organizations from raising funds using initial coin offerings (ICOs) on Monday. Following five straight weeks of gains, the BTC/USD pair is looking to close in the negative territory on a weekly basis.
Technical levels to consider:
The pair could encounter the initial resistance at $4400 (20-DMA) ahead of $4690 (daily high) and $4970 (all-time high). On the downside, supports could be seen at $4000 (psychological level), $3900 (Sep. 5 low) and $3600 (Aug. 22 low).
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