Can China’s Recent Crypto Optimism Trigger a Bitcoin Price Rise?

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• China recently launched its government-backed Metaverse platform.
• Binance CEO CZ believes that crypto-spreading China could act as a bullish trigger.
• Bitcoin price is currently trading below the $26,500 mark, noting a two-month low.

Until 2021, in addition to the United States, China had considerable dominance in crypto. This has since not only diminished but completely disappeared due to the country’s blanket ban two years ago. It would therefore be surprising if the crypto market suddenly started swinging again.

China is becoming crypto “tolerant”

According to a recent tweet from Binance CEO, Changpeng Zhao (CZ), a public broadcaster, China Central Television (CCTV), recently aired news about crypto. This was a landmark event considering the strong anti-crypto policy the country has maintained for the past two years. The executive said.

“It’s a big deal. Chinese-speaking communities are buzzing. Historically, coverage like this has led to bullfights.

This tweet from CZ came hours after China launched its government-backed Metaverse platform called “China Metaverse Technology and Application Innovation Platform”. The launch was in line with the Metaverse strategy announced in February this year, led by Nanjing University of Information Technology and Science (NUIST).

This is indeed a surprising turn of events for the country, given that it has stood against cryptocurrencies for more than two years now. In April 2021, China began its crackdown on cryptocurrency mining establishments, which led to a major drop in the price of Bitcoin.

The initial draw brought BTC down to just under $50,000, but the decline continued with Elon Musk’s announcement of Tesla ending acceptance of BTC as a form of payment. This took the cryptocurrency down 42% in two months to trade at $36,700.

Bitcoin price May 2021

Eventually, in September 2021, China imposed a general ban on the mining, trading and use of cryptocurrencies. This is why, according to CZ, a bullish attitude from China could be the key to a bull run. Another popular trader lilili.eth seemed to have a similar opinion stating,

“It’s not necessarily a bull market when there are Chinese people involved, but it’s definitely not a bull market when there are no Chinese people involved.

However, Wu Blockchain ruled out this possibility, saying that crypto broadcasts by China have happened before. However, he is in favor of Hong Kong allowing retail investors access to licensed crypto exchanges.

So, simply put, the “seen” uptrend is merely circumstantial as there is no concrete evidence to suggest that China has made any significant progress in terms of crypto acceptance. Investors should therefore not expect a major impact on the Bitcoin price.

Bitcoin price hits two-month low

Bitcoin price is currently trading at $26,350 after falling more than 3% in the past 24 hours. The world’s largest cryptocurrency is currently testing the 100-day exponential moving average (EMA) line.

The cryptocurrency might be likely to decline further, given that the Relative Strength Index (RSI) is in the bearish zone below the neutral line at 50.0.

If the cryptocurrency loses the 100-day EMA support line, it could fall to test the 200-day EMA at $25,000. But a daily candlestick close below could push it towards $21,500.

BTC/USD 1-day chart

However, if the cryptocurrency turns around and recovers to break the marked resistance at $27,500 coinciding with the 50-day EMA, it could continue to rise towards $30,000.