Exchanges that were deplatforming Chinese citizens before the deadline on December 31 had added to the Bitcoin selling pressure.
The Bitcoin bears had lost out at the final minutes when 2021 came to an end, and China was blamed for this weakness.
China’s Final Hammer Can Offer Optimism On Bitcoin
Just hours before the close of the year, Bitcoin dived $2,000 to reach its lows of $45,630 on Bitstamp. It was after this drop that BTC made a recovery to reach $47,200.
While something of an anticlimax and far below many popular projections, the lack of parabolic upside for Bitcoin has recently seen explanations shift to exchanges.
Chinese users, following years of the government tightening the screws around crypto trading, had until Dec. 31 to leave the major Chinese exchanges, which were obliged to deregister them.
For Bobby Lee, former CEO of exchange BTCC, this constitutes the “last hammer” in Beijing’s arsenal and one which could have been having a considerable impact on selling behavior.
“Maybe that’s why the hotly anticipated year-end bull market hasn’t taken off yet,” he argued in a series of tweets on the matter in early December.
“Waiting for the last hammer to drop in China! Expect a mini-correction when the enforcement news gets out, and then a relief rally that could bring us back on track for a real Bitcoin bull market.”
Other voices supported the theory, while this week, Blockstream also acknowledged the possible pressure from offloading Chinese users, who could be selling their BTC in order to withdraw capital — leading to rising balances.
It’s also a potential reason for optimism going forward as the Chinese exchange overhang will be cleared from the end of this month.