BTC-USD dropped to the lowest price since December 25 as South Korea announced further measures to regulate bitcoin trading. The cryptocurrency is down $1037.20 from the open (-6.75 percent) at the time of writing. The move comes just two weeks after a South Korean exchange, Yobit, suffered a second hack and forced the business to declare bankruptcy.
South Korea Moves to Ban Anonymous Trading
The price of bitcoin reached a fresh low on December 28 at $13,500.00 on the Bitstamp exchange, falling by more than $1,000 over the course of the day’s trading session. BTC-USD opened at $15,418.12 after bears managed to push the market down $400 or so by December 27’s close.
South Korea is one the largest markets for bitcoin, with Bithumb being the largest exchange in the world by volume, handling more than $3.3 billion in the past 24 hours. The price of bitcoin trades above $18,000, ether near $1,000 and ripple is above $1.50 on the exchange.
With bitcoin and other cryptoassets trading at a premium in this Asian market, the government’s new regulation is aimed at cooling the demand and ensuring the appropriate cybersecurity and KYC procedures are in place, pointing to an overheated cryptocurrency market:
“Cryptocurrency speculation has been irrationally overheated in Korea. We cannot leave the abnormal situation of speculation any longer.”
The move appears to enable a ban on anonymous trading accounts in a bid to make the emerging sector more accountable. The statement also hinted that exchanges face closure if the new rules were not met.
Nevertheless, the regulatory action echoes similar moves from the Chinese government previously and may not be as negative as it may appear. A translation of a written declaration released on December 27 indicates that the government remains open toward bitcoin and blockchain development and that exchanges not compliant with policies will not operate.
South Korean govt's #Bitcoin regulations from this week:
1. Gov't will impose regulations based on global trend.
2. Special cryptocurrency law drafted, *exchanges not compliant with policies* cannot operate.
3. Open towards bitcoin / blockchain tech development.Optimistic.
— Joseph Young (@iamjosephyoung) December 28, 2017
During the early months and Autumn of 2017, a flurry of statements from the authorities in China wreaked havoc on the price of bitcoin, causing several major corrections. For instance, on January 11 BTCManager reported that the PBoC was to launch ongoing spot checks of exchanges; the move forced bitcoin down from above $1,000 a few days prior to $790. However, with time, the price recovered and the random shocks to the market were quickly forgotten. During September, China also surprised the market by banning ICOs, pushing bitcoin down by more than five percent as the news circulated.
Bitcoin Price Outlook
The 15-minute price action is shown below. The market sits within the red Ichimoku cloud, which is changing color to green. The signal gives a bullish indication and we can look to go long near the conversion line ($14,240.37) and the base line ($14,036.52). However, the cloud is very thin and may want to wait for further confirmation, i.e. that the cloud remains green and starts to fan upward.
Momentum also has a bullish bias given that the Awesome Oscillator turned positive and green in color on December 28. Since the price is currently within the cloud, the market is suggesting to be in equilibrium; a breakout to either side is possible and we look to go long with a close above the cloud’s upper span.
The market has recently formed a fractal sell near the cloud’s upper span, the most recent fractal resistance. Fractal support lies at $13,907.70, so we look for the market to form a new floor around the $14,000 handle, which aligns with the base line (red). A breakout of either of the fractals level mentioned will also provide entries; for instance, a break below $13,907.70 would open up the recent low at $13,500, so short positions are suggested just below this level.
BTC-USD (Bitstamp, 15-minute)
The 2-hour price action also paints a more bullish outlook for the price of bitcoin. Notice, the previous 2-hour session has formed a Spinning Top pattern, which coincides with the support zone provided by the Ichimoku cloud, therefore, we look to buy strategically inside in the cloud and await further confirmation by looking for another bullish candlestick to follow the Spinning Top.
Also, we can use the high and low of the Spinning Top; for example, enter a limit buy order just a few cents above $14,573.50 and target $15,483.22. Alternatively, we can go short just below $13,907.70 with targets at $13,500.00 and $13,210.00. But given the market is resting on the Ichimoku cloud support, there is more of a bullish bias, and greater likelihood the sell signals may be false.
BTC-USD (Bitstamp, 2-hour)
The most recent fractals levels are at $13,500.00 (support) and $15,483.22 (resistance). Notice that the low at $13,500.00 corresponds with the lower span of the green Ichimoku cloud. Given this support zone has been tested, we should see bulls regain control of the market. With the entry signals from the 15-minute timeframe, we should look to take profit or partial profit near $15,483.22, as the market should tend toward this fractal resistance. A 2-hour close above $14,306.74 will give further bullish confirmation, as the market remains just within the Ichimoku cloud.
The author holds bitcoin and several other cryptocurrencies.
The post Bitcoin Price Down more than $1000 as South Korea Tightens Trading Activity appeared first on BTCMANAGER.
Author: BTCManager.com
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