Bitcoin sinks as China said to order exchange halt this month
BEIJING: Bitcoin tumbled, heading for its worst week since January 2015, after people familiar with the matter said China aims to stop exchange trading of crypto-currencies by the end of September.
Regional Chinese regulators were notified of the plan by a central bank-led group overseeing Internet finance risks, said the people, who asked not to be named because the information is private. Bitcoin dropped 9.3% to US$3,077.55 at 9.22am in London, extending this week’s decline to 28%.
The notice suggests Chinese policy makers will move quickly with their most far-reaching measure to rein in the growth of cryptocurrencies. China’s crackdown, which includes a ban on initial coin offerings announced last week, fuelled an abrupt reversal in bitcoin after it soared more than 700% in the 12 months through August.
The digital currency tumbled on Thursday after BTC China, one of the country’s largest cryptocurrency venues, said it would stop handling trades by month-end. Rivals OKCoin and Huobi said they haven’t received any regulatory orders to halt.
The People’s Bank of China didn’t immediately reply to a faxed request for comment.
The cryptocurrency ban will only apply to trading on exchanges, people familiar with the matter told Bloomberg on Monday. Authorities don’t have plans to stop over-the-counter transactions, the people said.
While Beijing’s motivation for the exchange ban is unclear, it comes amid a broad clampdown on financial risk in the run-up to a Communist Party leadership reshuffle next month.
Bitcoin’s surge over the past few years has fuelled concerns of a bubble and prompted warnings of a potential crash from sceptics including JPMorgan Chase & Co’s Jamie Dimon and billionaire investor Howard Marks.
China accounts for about 23% of bitcoin trades and is also home to many of the world’s biggest bitcoin miners, who use vast amounts of computing power to confirm transactions in the digital currency.
Some market observers have speculated that Chinese regulators will allow cryptocurrency exchanges to re-open once the government has measures in place to provide greater oversight.
Matt Roszak, the chairman of Washington-based Chamber of Digital Commerce and an investor in BTC China, said he anticipates that the exchange will resume operations by year-end.
“That is the expectation based on months of discussions – the timing of which may be impacted a bit with the ICO phenomenon,” Roszak said in an email.
“China is preparing to provide licensure for less than a handful of exchanges as it grapples with the meteoric increase in cryptocurrency trading, and speculation on ICOs – licensure and engagement with government will help propel this industry forward.”
Predictions for an eventual resumption haven’t done much to comfort bitcoin traders.
The cryptocurrency swung to a loss after Bloomberg reported the government notice and is now trading at the weakest level in six weeks. — Bloomberg
AXIATA Group Bhd (code: 6888) established a new all-time high of RM7.40 on May 6, 2013 following a massive rally.
Thereafter, this stock was generally in range-bound consolidation mode, lasting nearly two years.
During the process, the bulls made three notable attempts to move into unknown territory, once in November 2014 and twice in February 2015, but without success.
Axiata then slipped into correction mode and has stayed that way amid persistent profit-taking activity, which saw prices skidding to as low as RM4.11 in late November last year, the worst level in six years.
Soon, renewed bargain hunting interest emerged, helping to lift Axiata shares off the ebb. This counter finished flat at RM5.09 yesterday.
Based on the daily chart, Axiata has recovered back to the three-year-old descending trendline and the trend ahead is pretty straightforward.
A breach of the immediate resistance of RM5.20 accompanied by bigger trading volumes will signal the end of the correction phase. Another positive breakout of the next upper hurdle of RM5.40 will further raise investors’ optimism that Axiata is indeed on a new leg of uptrend.
Otherwise, this stock may drift sideways at best, if not retreating on another round of correction. Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the slide. It had triggered a short-term sell near the overbought area on Sept 13.
Also on the decline, the 14-day relative strength deteriorated from a reading of 78 on Sept 12 to end at the 61 points level yesterday.
Meanwhile, the daily moving average convergence/divergence histogram was still above the daily signal line to keep the buy call, but is weakening.
Technically, indicators suggest a bullish breakout remains elusive, but we are not discounting that, if the underlying tone of the principal market turns better, as Axiata has been generating some interest lately.
To the downside, initial support is pegged at the RM5 mark, followed-closely by the RM4.90 line. A crack of the lower floor of RM4.78 may drag prices down to the RM4.54RM4.55 band.
The comments above do not represent a recommendation to buy or sell.