Bitcoin tumbles as both Japan and India step up scrutiny

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Japanese authorities raid the hacked cryptocurrency exchange Coincheck
India takes a step aimed at eliminating the use of cryptocurrencies in ’illegitimate’ activities  
Goldman Sachs CEO Lloyd Blankfein denies the bank is going to open a crypto trading desk
 
After a relatively calm second half of January Bitcoin and other cryptocurrencies have finally taken a hit. This week is going to be one of the worst for Bitcoin over the course of the past months as it’s already slipped from above $11,500 to below $8,300 at the time of writing. There were some reports coming from Asia which could have sparked a broader sell-off among digital currencies.

Let’s begin with Japan where the country’s regulator raided virtual currency exchanges Coincheck on Friday just a week after the Tokyo-based exchange lost roughly $530 million in cryptocurrencies due to a hack attack. This coincided with a decline in Bitcoin below $9,000 for the first time since November. Let’s add the comment from Japan’s Finance Minister Taro Aso who said "we have launched an on-site inspection to ensure preservation of clients’ assets". Finally let us recall that Japan is a leading market for virtual coins accounting for nearly a third of global Bitcoin transactions in the last month of 2017 denominated in yen.


After a breakout of a support placed at around $9,100 the price has hastened its decline. Based on a range of a broken triangle pattern one may forecast that some corrective movements could appear in the vicinity of $7,500 which also coincides with a local support line. That said, a base scenario still assumes a continued fall even toward $5,500.


India strives to get rid of the use of digital currencies in criminal activities


Apart from Japan, India is also among causes why Bitcoin has plunged of late. India’s Finance Minister informed on Thursday that the country wants to ’eradicate’ the use of digital currencies in criminal activities. He told lawmakers in New Delhi that "the government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system". Having said that, it does not mean a complete end of blockchain technology there as FM added that the government is interested in the potential of blockchain and therefore it "will explore use of the technology proactively for ushering in digital economy".


Goldman Sachs backs off from launching its crypto trading desk  


According to CEO of Goldman Sach Lloyd Blankfein, who spoke with CNBC, the US investment bank is not going to open a cryptocurrency trading desk. At the same time he added that the bank has owned a stake in a crypto trading desk since 2015 (the New York bank was a part of a $50 million funding round in Circle Internet Financial in 2015, which was designed to allow users to transfer and receive Bitcoin). As we can see some prominent institutions seem to have more doubts with regard to the future of Bitcoin and other cryptocurrencies alike. Bitcoin supporters could be a bit frightened taking a look at the chart below illustrating a possible bubble mode.
The ongoing price action in Bitcoin seems to suit a bubble mode.