A couple of days ago, the bicoin market and the entire crypto currency market was fazed with a serious challenge as the market keeps dipping with investors losing their capital. Other coins weren’t even safe havens as none was spared from the market dip.
It was in the heat of this dip that China announces the complete ban if bitcoin and every other crypto currency market existing in their domain. Yet again the market dipped even further as China accounts for over 70% of the Bitcoin in circulation with countless number of computers mining bitcoin.
This singular move by china has made the entire bitcoin market totally unstable. Owing to the fact that the coins in circulation are mostly owned by chinese bitcoin miners and they have been hugely responsible for the sustainability of the crypto market.
Fast forward to this moment, the Chinese government crackdown on the coin miners have made them shut down their operations and rigs and stop mining and seek for alternative locations in the United States amd Canada.
Pending the time that is done, the market might experience some unusual bearish ir bullish reversal.
The Bitcoin and cryptocurrency just like every other commodity, currency or fiat currency is determined and controlled by the general law of demand and supply . In economics, the price of any commodity is ultimately determined by the demand and supply of that commodity in the sense that when a commodity is scarce the price tends to skyrocket and when a commodity is surplus the price is reduced. To simply put, the higher the demand the higher the price.
What this means for Bitcoin and the cryto world at large is that the exit of chinese miners from china and closing down of the mining rigs would lead to a drastic reduction in the supply of bitcoin which ultimately would be responsible for the price hitting an all time high. The laws of demand and supply would come into play here. With over 70 % of the market shutting down temporarily, the market would experience some form of upward and downward trend.
From my analysis of the market, the market might recede due to panic sellers. Sellers would want to ditch their coin as they can not predict the directional movement of the market. But for those who can hold their coin and have enough leverage to hold in any direction the market moves, they’d be able to enjoy the rise in price.
Over the next few weeks as rigs become closed, the price of the coin would eventually come back up to its all time high position.
However, traders are to tread with caution, because their is no fool proof prediction of the market. Don’t be too quick to sell tour coin and don’t be too quick to buy. Use Wisdom