Bitcoin prices have recovered from the drop caused by the People's Bank of China's (PBOC) declaration that cryptocurrencies are illegal. By prohibiting Chinese citizens from holding accounts in offshore exchanges, the PBOC closed a loophole exploited by investors. Furthermore, the ban extends to crypto exchanges from hiring resources domestically in China for roles such as marketing and sales, limiting their ability to provide services to Chinese consumers.
On Monday, Bitcoin prices hovered around $44,000 and Ethereum traded near $3,100, levels witnessed prior to Beijing’s announcement. The quick comeback is due to the fact that a crackdown by Beijing is nothing new to crypto traders, as the Chinese government has imposed some type of ban seven times in the last few months, and thus it is already priced into investor sentiment.
In terms of the price action, the RSI for the Bitcoin price on the daily time frame shows that the prices are oversold but the fact is that there is still not enough upward momentum for the price and this could push the Bitcoin price lower. In addition to this, the Bitcoin price has tested the 40K price level too may times and it is highly likely that we will see the price moving below the 40K.
