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Chinese Regulatory Crackdown Sends Bitcoin Lower

Bitcoin was falling by 10% Friday morning and traded below the $7,000 mark amid regulatory concerns from China, according to Reuters.

China Developing Its Own Crypto

Bitcoin traded at its lowest levels in six months in reaction to a new round of crackdowns on cryptocurrencies from China's central bank, Reuters said.

The People's Bank of China said it will investigate potential crimes involving digital currencies and added that exchanges could be "disposed of immediately," according to Cointelegraph.

The announcement could also be in part politically motivated, as China wants to develop its own digital currency. Chinese President Xi Jinping said in October that the government will accelerate ongoing developments of blockchain technology.

In the meantime, Chinese citizens are being cautioned "not to mix blockchain technology with virtual currency."

China's Strategy 'May Not Include Bitcoin'

It's unclear what China's digital currency and blockchain portfolio will look like.

Jamie Farquhar, a portfolio manager at crypto firm NKB Group, told Reuters it is now more evident that Bitcoin won't play a role.

"It's the realization that the positivity over Xi's blockchain announcement was exaggerated," he said. "It may not include Bitcoin at this point."

What's Next

Bitcoin's selling momentum could be sustained moving forward given a relative strength index (RSI) of 43, according to Coindesk. Any reading below 50 indicates bearish sentiments and stands at the lowest level since mid-March, the publication said.

Bitcoin was trading down 5.53% at $7,158.14 at the time of publication, according to Coindesk.

Related Links:

Bitcoin, Litecoin & Ripple - American Wrap: 11/21/19

China Has Three Times More Blockchain Patent Filings Than US

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