Earlier today, the price of Bitcoin, the leading cryptocurrency, plunged to an intraday low of $85,694, according to CoinGecko data.
This comes after the People's Bank of China (PBOC) vowed to intensify its crackdown on virtual currencies, stressing that cryptocurrency-related activities are considered illegal financial operations.
The statement specifically singles out "stablecoins" (cryptocurrencies pegged to real-world assets like the US Dollar). The bank argues that stablecoins fail to meet requirements for customer identification and anti-money laundering (AML)
The central bank reiterates that virtual currencies are not legal tender.
China has historically taken a very strict stance on cryptocurrency. They banned crypto exchanges in 2017 and banned crypto mining in 2021.
Officials warned of a recent surge in speculative trading, which likely prompted the recent warning.
Is the $40K level next?
If the price of Bitcoin drops below the high $70,000s, it will enter this lower support area, according to trader Peter Brandt.
Bitcoin's next major correction could see its price drop from the high $70,000s all the way down to the mid-$40,000s.
Brandt has joked that the "shipmates" of Strategy CEO Michael Saylor might soon start asking about lifeboats.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team