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Bitcoin Beclamed After The Chinese Storm

Bitcoin Beclamed After The Chinese Storm

Nick Cawley, Strategist

Talking Points

- Bitcoin and Ethereum stemmed Monday’s losses but a period of consolidation is required to restore confidence.

- Korean Won (KRW) and Chinese Yuan (CNY) dominate turnover in the last 24 hours.

The DailyFX Bitcoin Glossary is designed to provide traders with a reference for important terms and concepts essential for understanding the emerging cryptocurrency universe.

Bitcoin (BTC), Ethereum (ETH) Pull Back from Monday’s Lows

After heavy losses were seen across the crypto-currency market place on Monday, buying interest nudged the market as a whole back into positive territory, but gains are marginal and confidence remains low. The sell-off, prompted by China’s ban on new ICOs and the inspection of 60 ICO exchanges, saw BTC and ETH register high-low losses in excess of 20%, the traditional definition of a bear market. And to add to the unease in the marketplace, Business Korea reported that the country's financial authorities are looking at ways of strengthening regulation on digital currency trading.

If you would like to know how to trade panic, and make volatility work for you, check out the DailyFX University Expert Education Section here.

The one hour chart below shows the extent of the fall and pullback in the last 48 hours and worryingly shows the 20- and 50-day emas trading below the 100-day ema, normally a bearish signal but more accurate on a chart with a longer time frame.

Chart: Bitcoin (BTC) Price One Hour Timeframe (August 29 – September 05, 2017)

Chart by IG

Chart: Ethereum Price One Hour Timeframe (August 31 – September 05, 2017)

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Looking at all currency trading volumes over the last 24 hours, the interest from China and Korea is obvious, with the Korean Won (KRW) and Chinese Yuan (CNY) dominating proceedings. The top three tokens account for around 70% of market turnover.

Market Moves/Top 8 Capitalizations – September 05, 2017

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--- Written by Nick Cawley, Analyst.

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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