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| Bitcoin collapses after China raid |
While the recent volatility in the cryptocurrency market is showing no signs of slowing, bitcoin is down 9% on Monday.
Market participants indicated that there is not enough liquidity and that the Chinese crackdown on Bitcoin mining is escalating.
Bitcoin dropped to $32,288, its lowest level in 12 days, and last time it fell 7.5%. If this continues, the decline will be the largest in about a month.
Authorities in the southwestern province of Sichuan on Friday ordered the closure of crypto-mining projects.
China's State Council last month promised to crack down on bitcoin mining and trading as part of a series of financial risk control measures.
The blow to Chinese miners could mean that China is looking to sell tokens in a weak market and drive prices lower. Chinese bitcoin production accounts for more than half of global bitcoin production.
According to the University of Cambridge, Sichuan is the second largest bitcoin mining province in China.
Some miners move their production there during the rainy summer to take advantage of the abundant hydropower resources.
Sichuan authorities have ordered the closure of crypto-mining projects in major mining hubs.
Other famous mining regions such as Inner Mongolia have led crypto mining for electricity generated from highly polluting sources such as coal in their demands on industry.
Bitcoin mining:
The Sichuan Provincial Development and Reform Commission and the Sichuan Provincial Energy Bureau have jointly called for the closure of 26 suspected mining projects.
The notice requires the Sichuan Provincial Electric Corporation to carry out inspections, make corrections, and report the results of the inspection. They should immediately stop feeding the crypto projects they find.
The authorities have asked the local Sichuan government to start checking and shutting down crypto projects. New projects are prohibited.
Bitcoin miners usually hold large holdings of cryptocurrencies, so any movement in sales in large quantities will cause prices to fall.
Bitcoin has fallen by more than a fifth in the past six days. It has halved from its April high of $65,000. However, this year it has increased by more than 10%.
In addition, Ethereum is the second largest cryptocurrency by market capitalization.
Ethereum fell below $2000 for the first time in about a month. The last time it fell 10% to $2,025.31.