Bitcoin lost nearly 10% of its value on Thursday as unverified reports came out of China suggesting the Peoples Bank Of China (PBOC) has ordered banks and financial institutions to close the trading accounts of more than ten, leading Chinese exchanges. The ruling will supposedly come into effect on April 15, meaning holders will have until that date to take cash or bitcoin out of their respective exchanges or risk a freezing or a complete loss of their assets.
The BTC/USD reflected the trouble, ending Thursday at month-long lows of 472.00, which served up considerable support and catalyzed something of a correction during early Friday. The correction found resistance at 529.41, and at the European open the BTC/USD gave back much of the gains. The pair is currently trading just shy of in-term support at 491.28.
Risk-off sentiment will likely compound yesterday’s sell off, as bitcoin holders rush to cash in their holdings before the accounts of their holding exchanges are shut down. This could put downside pressure on the BTC/USD and lead to further decline heading into the weekend.
Keep an eye on the aforementioned support at 491.28 as a validator of this bias. A break, and a close below, this level would offer up an initial downside target at 484.46. Beyond that, daily lows at 473.09 represent a secondary target.
Having taken such a hit yesterday, it is not inconceivable that the bearish fundamental bias is invalid and the BTC/USD will continue to correct on Friday. Look to in term resistance at 501.19 as potential hint that this is the case. A break above this level would not invert sentiment on its own, but it would highlight509.76 support as a potential upside target. A close above this level would go some way towards validating further correction, and offer up a secondary target at 523.50 support.
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