Cryptos Bounce Back After China-Fueled Friday Mass Sell As Investors ‘Buy Down’



Cryptocurrencies saw a solid recovery on Monday after Friday’s crisis, when China declared all crypto-related transactions in the country illegal, stepping up its crackdown on digital assets.

Bitcoin BTCUSD,
topped $ 43,000 on Monday, from its Friday low of below $ 41,000, while the ether ETHUSD,
returned above $ 3,000, after trading below $ 2,800 on Friday.

The number of bitcoins held by long-term holders has hit a record high of 80.5%, wrote Matt Blom, global sales and trading manager at Eqonex, in a note on Monday, citing data from Glassnode.

Traders in the Americas have “bought down” bitcoin and other smaller coins because they consider Friday’s crash “an overreaction,” Kraken’s OTC office wrote in its Friday notes.

So far, decentralized exchange tokens such as dYdX and Uniswap have led the price rebound as Chinese investors turn to them as alternatives to over-the-counter crypto services, such as those provided on the Huobi crypto exchange. , which was particularly targeted in the country’s most recent strike.

On the other hand, centralized crypto exchanges such as Huobi, OKex, and Binance, with significant market share in China, have been slow to recover from the losses.

China’s crackdown on crypto has led more and more companies to restrict or close their operations in Beijing.

Increase in activity on decentralized exchanges

In the last 24 hours, the volume of transactions on the decentralized crypto exchange dYdX increased by 163%, reaching $ 8.7 billion, according to CoinMarketCap. In comparison, the 24-hour trading volume for the centralized crypto exchange listed on the Nasdaq Coinbase COIN,
+ 0.18%
was approximately $ 3.1 billion. A centralized crypto exchange relies on intermediaries, unlike a decentralized exchange.

“The capital that has been stored in centralized exchanges in the past [in China] will be on-chain moved to decentralized wallets, ”Vince Yang, co-founder of the zkLink decentralized exchange, told MarketWatch.

“What remains to be seen is whether dYdX and other decentralized platforms will capture all capital flows,” Yang wrote. “Right now, most decentralized exchanges are not prepared for a large number of users and trading volumes.”

The Uniswap UNIUSD token,
+ 2.13%,
another major decentralized crypto exchange, has seen an increase of over 40% since Friday.

Huobi to remove Chinese user accounts; Ethereum SparkPool mining pool closes

After China issued its latest crypto ban, the global crypto exchange Huobi’s token fell 37%, recently trading at $ 7.60.

Huobi ended the registration of new customers in China from last Friday and “will phase out existing user accounts in mainland China” by December 31, the company said on Sunday. declaration.

“At the same time, we want to ensure the security of the assets of these users,” Du Jun, co-founder of Huobi Group, parent company of the Huobi Global stock exchange, said in a statement. “Clients will be able to transfer their assets to other exchanges or wallets in the coming months.”

Du said he expected any short-term impact on Huobi’s revenue to be mitigated, as the company’s activities outside of China accounted for nearly 70% of its total trading volume.

Meanwhile, China-based SparkPool, one of the world’s largest Ethereum mining pools, announced on Monday that it would shut down all of its services by September 30, according to A declaration on his official WeChat account.

The company has stopped providing services to new users in mainland China since Friday, he said.



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