The crypto market underwent a major price dump on September 24, when the prices of Bitcoin tumbled to below $41K. Following this downward trajectory, more than $400 million worth of long and short positions were liquidated in one day.
Another FUD caused by China caused the recent tumble in prices. Following this occurrence, the crypto market turned red, and most cryptocurrencies made major losses.
China Cracks Down on Cryptocurrencies
On September 24, China made another announcement that depicted the country was further enforcing its crackdown against cryptocurrencies.
The People’s Bank of China (PBoC) published a document that reminded citizens that cryptocurrencies were banned. The announcement further stated that transacting with exchanges was also prohibited.
China has had a negative stance on cryptocurrencies over the years. While these bans have been announced before, the country frequently reminds investors about it, creating FUD in the crypto market and causing plunges.
The document by the country’s central bank stated that digital assets were illegal, a statement aired several times before. The statement also added that financial institutions, payment firms and online platforms were prohibited from enabling cryptocurrency trading.
The central bank also stated that it was enhancing its monitoring operations over the nature of the digital asset sector in the country. In May, the country cracked down on Bitcoin mining, a move that saw the asset lose nearly a third of its value. However, the recovery of mining operations after mining firms moved offshore has led to the recovery of the mining hashrate, and Bitcoin has made significant gains.
One of the reasons that the central bank gives about the crackdown on cryptocurrencies is that the move is done to protect investors from the nature of cryptocurrencies. The bank further adds that cryptocurrencies promote illegal activities.
Crypto Market Tumbles
Analysts on Twitter stated that there was a likelihood that the PBoC statement was issued early in September and only became available on the interment on September 24. However, it still caused major disruptions across the entire market as data from Bybt shows $418 million of both long and short positions were liquidated.
Before the announcement, Bitcoin had tested the $45,000 level and had shown great resilience in maintaining the level. The coin lost $3000 following the news and touched $41K. Currently, Bitcoin has recovered, and it is fighting to maintain $42K.
Altcoins were among the hardest hit, as Ethereum dropped to $2800 after the news, and it is still trading at these levels. The entire crypto market plummeted by around $150 billion shortly after the announcement.
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