Bitcoin | Representative image
Over the weekend, world's most popular cryptocurrency Bitcoin triggered a technical sell signal, indicating more downside ahead.
Bitcoin experienced a bearish "death cross" which occurs when the 50-day moving average (DMA) dips below the longer-term 200-day moving average. The signal is widely followed by technical analysts and traders.
The crypto coin was trading lower by 4% at $32,715.28 at 19:48 IST Monday, according to cryptocurrency trading website coindesk.com. Its market capitalisation also declined to $613.03 billion. However, it lowest value during the 24-hour trading was reported to be $31,744.99 and highest was reported at $36,119.80. It opened at $34,246.37 during the time of trading on Monday.
Bitcoin tumbles 10% in wake of deepening China crackdown
While the lagging crossover indicator alerted traders that bitcoins are solidifying their uptrend and are most likely to experience a continuation, it resulted in lower prices. Bitcoin stocks sold off by 14 percent as of Monday morning after it struck death cross on Saturday.
Reports suggest that the technical sell signal in the cryptocurrency kicked in post negative news flow including China's continued crackdown on bitcoin mining. Chinese authorities ramped up their crackdown on cryptocurrency mining over the weekend, with bodies in the Sichuan province ordering 26 of the biggest miners to halt operations, reported Business Insider.
Furthermore, the report claimed that Chinese authorities held a meeting with officials from major banks to reiterate a ban on providing crypto services.
Other than bitcoin, cryptocurrencies including ether and binance coin dropped by approximately 6 and 4 percent respectively, according to Coinmarketcap.
Meanwhile, Chinese state media outlet -- Global Times -- reported that more than 90 percent of China's bitcoin mining capacity would be shut down on Monday.
MicroStrategy CEO Michael Saylor, however, sees the recent decline in bitcoin as a buying opportunity. The firm said that it has acquired an additional $489 million worth of bitcoin, bringing its total holdings to 105,085 bitcoins.
Earlier in May 2020, bitcoin experienced a golden cross, but since then the digital currency surged by more than 300 percent.