rtmark
LearnBonds.com

Bitcoin surges as Inner Mongolia mining hub faces government crackdown

bitcoin

The price of Bitcoin has bounced back from its late February lows after reports that one of the coin’s largest mining hubs in the world could be facing a government crackdown amid concerns related to high energy consumption levels.

Local authorities of Inner Mongolia – an autonomous region that is part of the People’s Republic of China – have effectively banned cryptocurrency mining activities in the region, putting in harms way around 8% of Bitcoin’s supply as the amount of electricity required to perform this activity has become a concern for Chinese regulators.

An exclusive report from Bloomberg indicated that the decision came after the region failed to meet a milestone set by China’s economic planning authority in regards to energy consumption levels – which are part of the country’s goal to dramatically reduce carbon emissions by 2030.

The cryptocurrency market seems to be reacting positively to the news, as a constrained supply of BTC could lead to a short-term imbalance.

As a result, the price of BTC has gone up 13.2% since the report broke, posting a 10% gain on the day that the news broke, while also jumping 6% today at $51,225 during early cryptocurrency trading action.

A project from the University of Cambridge highlighted that Bitcoin mining activities consume around 128.84 terawatts per hour every year, an amount that is similar to the annual energy consumption of Argentina.

China accounts for roughly 65% of the world’s bitcoin mining industry with Inner Mongolia alone taking up 8% of the market share as its energy prices are quite low compared to other regions.

This latest anti-mining move has brought back fears about a potential countrywide crackdown coming for the Bitcoin (BTC) mining industry, as the PRC has already banned other activities related to cryptocurrencies including initial coin offerings and trading.

What’s next for Bitcoin (BTC)

bitcoin 1
Bitcoin (BTC/USD) price chart – 1-day candles view with volume, RSI, MACD, and other indicators – Source: TradingView

The Inner Mongolia news seems to have helped in reversing Bitcoin’s latest downtrend, with the price bouncing from its 28 February lows while reentering the $50,000 mark.

Today’s uptick seems to be stopping at the 0.236 Fibonacci extension shown in the chart above, while the price is breaking above the 2.618 extension derived from the 2017’s retracement again.

These Fibonacci levels have been relevant for Bitcoin ever since the cryptocurrency reached its all-time highs of $58,354 in late February and they serve as potential targets for the price action.

For now, the lower trend line shown in the chart is the next resistance to overcome for BTC. Meanwhile, the RSI remains on a downtrend until proven otherwise, while the MACD has not yet sent a buy signal despite the coin’s latest upticks.

If the price were to move above the $53.5K threshold, chances are that the bull run might accelerate as a result of the breaking of multiple important resistance levels.

However, it is important to note that trading volumes are not remarkably high at this point, which means that a big portion of the market is not yet embracing this bull run as a buying opportunity.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission on real stocks

Rating

64 traders signed up today

Visit Now

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

What we like

  • 0% Commission
  • Trade Stocks Via CFDs
  • Authorized & regulated by the FCA

Min Deposit

$100

Charge per Trade

Zero Commission

Rating

Visit Now

76.4% of retail investor accounts lose money when trading CFDs with this provider.

Available Assets

  • Total Number of Stocks & Shares+2000
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Future
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • Dax Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire transfer
  • Credit Cards
  • Bank Account
  • Paypal
  • Skrill
Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.

Alejandro is a financial writer with 7 years of experience in financial management and financial analysis. He writes technical content about economics, finance, investments, and real estate and have also assisted financial businesses in building their digital marketing strategy. His favorite topics are value investing and financial analysis.