Fellow Folks,
the Casinos have closed. Many market observers have witnessed the significant drop of volume during last week's trading, which is the consequence of regulatory pressures from People's Bank of China (PBoC). As a consequence of PBOC's intervention, the three largest bitcoin trading platforms by volume, BTCC, Huobi and OKCoin have restricted margin trading for good. Moreover for the first time in their history they introduced a 0.2% fixed-rate fee on all buy and sell orders for Bitcoin and Litecoin, starting from 24th of January.
What is the Implication of this move for market observers and traders I have wondered. Also, I have heard many traders complaing about thin orderbooks and low volume in general. Indeed, charts look quite ugly in comparison to the OKCasino previously. However what is more prominent to consider is that fake volumes are gone, which means that every trade in these chart from now on is a reflection of a real trade. I remember, often I have asked myself how it can actually be that on OKCoin and Huobi there is always an abundance of coins to be sold or bought at any price level in such quantities that do not make sense when considering that crypto in itself is quite rare, particularly Bitcoins or Litecoins.
Well this game is over for now. Although charts look not that that attractive anymore, for the first time since the trading you observe and analyze is genuine. Most of these coins in the orderbooks are real coins and real attempts to buy or sell. Based on that assumption we will soon see what role the factor scarcity really means in Crypto. That ultimatively means that high volume buys genuinely reflect market demand, which could not be translated that simply back in the times of OKCasino.
Eventually I believe prices will significantly increase as a consequence of this measurement. Because when this is real buying and selling taking place in the largest three exchanges of China, then we have a classic situation:
"Would you rather buy crypto, or sell crypto?"
And we all know where this is going then...
Trade Carefully & All The Best