Crypto crash Reasons

• Litecoin price stabilizes
• Bitcoin is legal tender in El Salvador
• Xinjiang officials ban Bitcoin mining in some zones
• Crypto exchanges blocked by social media sites in China

Trending News: El Salvador Boosts Bitcoin Stature as China Further Cracks Down on Crypto

Events of June 8 quickly evaporated following exciting news on June 9.

For one, traders still don’t need to forget that crypto prices favor bears.

Sellers are in the driving seat even after the reversals of June 9. If yesterday’s price action guides, the influence of Bitcoin shouldn’t be understated.

For now, clear support is at around $30k. Unless there is a sharp spike in activity, thrusting Bitcoin above $35k to over $42k, wiping out gains of May 19, bulls stand a chance.

Technically, provided BTC/USD prices are oscillating inside H2 May 2021, the odds of price dumps remain high.Crypto crash

Bitcoin is Legal Tender in El Salvador

This is despite news of El Salvador and President Nayib Bukele doing what Nakamoto wouldn’t have expected. Bitcoin is now legal tender in South America’s smallest country.

It's official. The El Salvador law has been passed. #Bitcoin is a legal tender in the country. Let's just take a moment to appreciate the moment 🙏🏻 pic.twitter.com/9n7MxqLgjp

— Coin Bureau (guy.eth) (@coinbureau) June 9, 2021

The president reckons that if BTC is adopted, it will help jump-start the economy, taming economic downturns spawned by the coronavirus pandemic.

Besides, since 25 percent of the country’s GDP is from remittance, over two million El Salvadorans would have a cheaper way of remitting funds.

There are more perks for crypto businesses and entrepreneurs.Crypto crash

For instance, a 3 BTC investment gets one a permanent residency.

In addition, Crypto investors are relieved from tax breaks. There will be no capital gains tax on BTC as legal tender.

Bitcoin’s Bombardment in China

Meanwhile, officials in Xinjiang, acting on orders from the Changji prefecture government, ordered Bitcoin miners in the Zhundong Economic Technological Development Park to cease operations immediately.

Because China's restrictions policy, Bitcoin hashrate starts to decline, ranked first antpool fell 25%. pic.twitter.com/9Dfqxr8OZe

— Wu Blockchain (@WuBlockchain) June 9, 2021

In a notice served on June 9, the goal—in mirror likeness of Inner Mongolia’s directives—is part of making China compliant with global efforts to make the world green.

FYI the county being discussed is in red with broader Xinjiang area in orange. I’d have to confirm but to my knowledge there’s nothing particularly special about this country wrt bitcoin mining. https://t.co/nUDDgOmsQ6 pic.twitter.com/2WvoS4q9zB

— Matthew Graham (@mattysino) June 9, 2021

That means cutting carbon emissions and protecting the environment.

Even with overflowing evidence showing Bitcoin mining is green and miners—by and large—environmentally conscious, critics maintain that BTC’s energy-inefficiency makes it a wasteful and degrading remittance technology.

While this happened, leading social media sites in China have blocked leading cryptocurrency exchanges like Binance, Huobi, and OKEx.

Litecoin Price Analysis

The positive correlation between Bitcoin and Litecoin means that the latter will also crash if the former craters.

From the daily chart, LTC/USD is within a bear breakout pattern.

Notably, LTC prices are under pressure. There have been weak attempts to reverse losses of May 19 without success, judging from the candlestick arrangement.

Critical support stands at between $140 and $120.

On the reverse side, the middle BB and $200 are the immediate buy trigger for determined Litecoin bulls.

As such, this means two things:

If LTC/USD bulls clear $200, aggressive traders may find loading opportunities on pullbacks as they aim for May 19 highs of $300.

On the flip side, steep losses in lock-step with May 19 bear bar below $140 may force LTC/USD towards $120—May 2021 low.

Extended losses may further see LTC crash towards $70.

Chart Courtesy of Trading View

Disclosure: Opinions Expressed Are Not Investment Advice. Do Your Research.

Dalmas Ngetich

Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies.