China has officially banned all cryptocurrency transactions. Earlier, when the country had banned such digital asset transactions, it had left some kind of a loophole because the ban was limited to domestic entities. Therefore many foreign cryptocurrency exchanges were providing services to local Chinese citizens. The Chinese government did not like that and has now banned everything. It will also start trials of the digital renminbi soon and some say this ban is to draw attention to the state-sponsored digital asset. Of course, what this does is create a black market for cryptocurrency as it did in India when India's central bank decided to ban Bitcoin. Link
The move will also eliminate Bitcoin mining from China. Is that good? Well, if over the past many years, you have heard Bitcoin naysayers complain about Bitcoin's reliance on China for mining, then surely it is a good thing. China thinks Bitcoin mining is too polluting and banning Bitcoin mining will help it achieve its goal of becoming carbon neutral (...by 2060, of course).
Anyway, the news was negative enough to cause a slump in Bitcoin price. Bitcoin fell ~10% after the news and has recovered 50% of the loss since then.
The chart above shows Bitcoin's RSI on the daily chart is hovering very close to oversold levels. However, the chart presents a more interesting pattern that makes me bullish on Bitcoin and makes me believe that the ongoing correction is likely to end soon - a bull flag.
The next leg up should surely take Bitcoin to new highs. There is the risk of a global market sell-off but the market is treating property market issues in China to be a local issue as demonstrated from the recovery in equities and commodities. The weekly chart of Bitcoin shows RSI in no man's land and there may be room for the correction to continue for a while before Bitcoin's move up.