Bitcoin Faces Bear Move as Price Drops Toward $15K

Bitcoin is looking weak today after prices failed to hold above $17,000 levels at the weekend.

Coindesk's Bitcoin Price Index (BPI) fell to a low of $15,253 earlier today and was last seen trading at $15,345 levels. According to data source OnChainFX, bitcoin (BTC) has depreciated by 8.86 percent in the last 24 hours.

Notably, fears of a China crackdown on bitcoin mining may have weakened the bid tone around the world's largest cryptocurrency by market capitalization.

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reported last week that local regulators in China may not longer offer discounted electricity and tax deductions to mining companies. Further, a leaked document now suggests that China's top internet finance regulator is requesting that local governments push bitcoin-mining operations towards an "orderly exit" from the industry.

Given that China is the world’s capital of bitcoin mining, and accounts for more than two-thirds of the world's processing power devoted to the process of securing the network, such moves – if proved to be genuine – could bring more pressure to prices of the cryptocurrency.

The technical chart also indicates an increased risk of a bearish breakdown.

Bitcoin chart

The above chart (prices as per Coinbase) shows:

• Bear flag – a bearish continuation pattern. A downside break – i.e. a close below $14,460 (flag support) – would indicate the corrective rally from the low of $10,400 (Dec. 22 low) has ended and the sell-off from the record high of $19,891 has resumed.
• The relative strength index (RSI) is back below 50.00 (bearish territory).
• Since Dec. 21, trading volumes have remained well below the 30-day moving average. A sharp rise in volume on negative price action today (today) would boost odds of a bearish breakdown in prices.

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• A high volume bearish flag breakdown (close below $14,460) would open doors for a drop to $10,400 (Dec. 22 low). A violation there would expose the next support lined up at $9,965 (100-day MA).
• Bullish scenario: Only an upside break of the flag would revive the bull run and shift risk in favor of rally to fresh record highs above $20,000.

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