Bitcoin bounces above $35,000 despite increased regulation

By Samuel Indyk

AiVIF.com – The price of Bitcoin briefly bounced back above $35,000 on Monday despite further regulatory scrutiny for the cryptocurrency industry.

Over the weekend, the UK’s Financial Conduct Authority banned Binance, the world’s largest cryptocurrency exchange, from conducting any regulated activity in the UK. In the consumer warning, the regulator also advised people to be wary of adverts promising high returns on cryptoasset investments or cryptoasset-related products.

Bitcoin initially fell on the news, hitting a low of around $30,200 on Saturday before rebounding above $35,000 today.

Cryptocurrency bulls will look at the bounce off the psychological $30,000 support level as further evidence that the recent sell-off may have run its course. Some have also suggested that increased regulatory scrutiny is proof that the industry is maturing.

On the other hand, the regulatory clampdown in the UK could be viewed as a sign of things to come, with the potential for further strict regulation from across the globe.

China has renewed its crackdown on the cryptocurrency industry in recent weeks, with a focus on mining activity. Last week’s action to shutter mining activity in Sichuan province helped briefly send the price of Bitcoin below $30,000.

Technical picture

To the upside, a firm break of $35,000 could open the door to the 50DMA at around $38,600 before a test of the all-important $40,000 level.

A break above $40,000 could then lead to a test of the 200DMA, seen around $43,600.

On the downside, support is seen at $32,000 and around $31,250 before the $30,000 level comes into play.

If a breach of $30,000 manifests itself into further selling pressure, some have argued Bitcoin could drop into the mid-$20,000s.

“One more push down to $30,000 might not hold given the number of times we’ve tested it and there’s only so much liquidity there,” said Vijay Ayyar of cryptocurrency exchange Luno.

“Post-$30,000 and we should probably see $24,000 to $25,000,” Ayyar added.

The price action of Ethereum has been similar with the world’s second largest cryptocurrency hovering around the key $2,000 level, but well below the all time high of $4,300 hit in May.