September 26, 2022

China Ban Aftermath: Why The Crypto Downtrend Could End On New Year’s Eve

4 min read

Is the China ban to blame for the recent Bitcoin sell-offs that brought down the whole crypto market? That is the widespread theory. As the main exchanges close their operations in mainland China, the citizens have been fearfully offering their possessions. They do not understand if they’re going to have the ability to transact or even offer their cryptocurrencies in the future, so they’re going back to the Yuan. And we have charts from Arcane Research and a carrot to show that.

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Let’s stop wasting time and go to the hard data.

How’s The China Ban Treating Huobi?

The heading, offered by this carrot, is the following. “Asia’s biggest exchange, Huobi, has stopped related trading in China. Bitcoin has been streaming from Asia to the United States and Europe for some time.” To elaborate on that, we highlight good friends at Arcane Research’s The Weekly Update “The last effect of the Chinese bitcoin restriction from September is unfolding. After slowly removing Chinese mainland users, Huobi’s share of the global open interest has actually fallen to 2%, down from its Feb 15th, 2020 peak of 20%.”

And they have the charts to show it:

BTC Futures Open Interest, OKEx and Huobi|Source: The Weekly Update.

And even more information and important dates:

” Huobi has accelerated its retirement of Chinese mainland customers. On Sept 24th, Huobi ceased registrations for brand-new mainland Chinese consumers. On Dec 15th, Huobi ceased spot trading for Chinese people. Additionally, from Dec 15th to Dec 31st, Chinese mainland consumers are only able to sell digital properties.”

So, the crypto downtrend could end on New Year’s Eve since it’s the last day that Huobi’s “Chinese mainland customers” will be able to sell. This may seem like an exaggeration, however take a look at this bloody red chart:

The sell-pressure from China is genuine. Asia’s largest exchange, Huobi, has actually closed OTC and exchange transactions. Many people have actually been required to sell their #bitcoin since they are fretted they won’t have the ability to trade in the future. Huobi'' s net position modification red past months: pic.twitter.com/gKInTQpE7k

—– Root 🥕 (@therationalroot) December 18, 2021″ The sell-pressure from China is genuine,” and it isn’t only coming from Huobi. How’s The China Ban Treating OKEx? The other Chinese giant’s circumstance is more complicated. What’s going on in there? How are they handling the China ban? Reports are flying. According to the carrot,” The ok exchange has actually not yet issued a statement on the clearing.” The Weekly Update has a bit more information, however it’s still complicated.

” The public declarations from OKEx are far more uncertain than those of Huobi. The exchange has actually publicly specified that the exchange website will be unattainable for mainland Chinese traders. Even more, the exchange has stated that it will not set up workplaces and teams in mainland China while preserving the policy of “exiting the Chinese mainland market.” In OKEx’s subreddit, the OKEx helpdesk shared a screenshot from its P2P market, currently allowing traders to trade utilizing the Chinese Yuan.”

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As the first graph shows, OKEx open interest share is also in sharp decrease. “In April 2020, OKEx accounted for 30% of the open interest in the futures market, in stark contrast to today’s 8% market share.” The signal is clear, even if the situation is not.

BTC price chart for 12/22/2021 on Coinbase|Source: BTC/USD on TradingView.com
What About Binance?

Regretfully, we don’t have as much data about them. The carrot declares that “Binance will be partly cleared at the end of the year.” It also notifies us that “Binance’s net position change recently red (most likely since of China),” and gives us 2 very helpful charts. In them, the sell-pressure that the China restriction produced is obvious. While Binance is red, the United States and Europe-centric Kraken is quite in the green.

If we compare this to Kraken, which is mostly active in United States and Europe, we can see that they are plainly Buying The Dip. ✊ pic.twitter.com/qvBWknDKoX– Root< img src="https://s.w.org/images/core/emoji/13.1.0/72x72/1f955.png" alt ="" class="wp-smiley" design="height: 1em; max-height: 1em;"/ > (@therationalroot) December 18, 2021

So, is the crypto downtrend going to end on New Year’s Eve? The data promotes itself. Let’s cross our fingers, however.

Featured Image: Myriams on Pixabay|Charts by TradingView