China Hype Implodes as Bitcoin Completely Retraces to Pre-Rally Levels

  • Bitcoin shows signs of a pump-and-dump scheme.
  • A renowned analyst says BTC is dying.
  • Despite the bearish sentiment, countries around the world want to allow investors to trade the pioneer cryptocurrency.

On Oct. 25, Chinese President Xi Jinping addressed the nation about the “important role [that blockchain technology would play] in the next round of technological innovation and industrial transformation.” He declared that his administration would focus on getting China to “take the leading position gain” in blockchain research and development.

President Xi said:

Major countries are stepping up their efforts to plan the development of blockchain technology. Greater effort should be made to strengthen basic research and boost innovation capacity to help China gain an edge in the theoretical, innovative and industrial aspects of this emerging field.

Xi’s endorsement of the new digital ledger technology sent bitcoin up over 40 percent. This cryptocurrency went from trading at a low of $7,400 on Oct. 25 to a high of $10,500 on the next day. Despite the bullish sentiment that China brought into the market, less than a month later BTC is retracing to the same level where it began surging.

Bitcoin Us dollar price chart
Bitcoin plummets to $7,600. | Source: TradingView

The “Classic Pump and Dump”

According to Peter Schiff, CEO and chief global strategist at Euro Pacific Capital, bitcoin’s recent price action is the “classic pump and dump” scheme. He affirmed that market manipulators are playing with those who are investing in BTC and urged investors to “wake up.”

Schiff argued:

Bitcoin spiked by 40% in less than 24 hours. Then in the ensuing 4 weeks, bitcoin steadily lost 100% of those gains. This is a classic pump and dump. Run the price up to sucker in momentum buyers. Then sell into that demand. When will bitcoin buyers wake up? You’re being played.

The veteran gold bug believes that the spike in volume that took BTC to $10,500 on Oct. 26 “had nothing to do with China.” Schiff assured that the so-called bitcoin whales have the ability to do whatever they want with a “weak market” that lacks liquidity.

These market makers create the illusion that bitcoin is surging so that “hodlers don’t lose faith and cash out,” according to the longtime crypto critic. He concluded by stating that bitcoin is not the future of money, but gold is.

Peter Schiff Tweet
Bitcoin is not the future of money, according to Peter Schiff. | Source: Twitter

Bears Show Their Claws

Schiff is not the only one who maintains that bitcoin is doomed to fail.

In a recent tweet, Mark Dow, a former US Treasury and International Monetary Fund economist, stated that BTC is “dying.” He believes the pioneer cryptocurrency is contained within an “echo bubble unwind” that features “occasional upside spasms.” But, overall Dow expects bitcoin to make lower lows as the “FOMO” behind it weakens.

Mark Dow Tweet
Bitcoin is dying, according to Mark Dow. | Source: Twitter

Despite the pessimistic views from these analysts, different countries around the world are making significant strides to allow investors to trade cryptocurrency assets.

The Monetary Authority of Singapore released a consultation paper seeking views from interested parties to authorize the trading of crypto derivatives. Meanwhile, Hong Kong’s Securities and Futures Commission (SFC) published a regulatory framework that enables cryptocurrency exchanges to be regulated.