The BTCC and the two biggest Chinese cryptocurrency exchanges announced a trading halt which sent cryptocurrencies into free fall on Friday. Within 24 hours the cryptocurrency market lost more than $40 billion, down to $120 billion from the initial $160 billion. Chinese exchanges, however, have not yet received “banning” notices from regulators.

It is likely that the exchanges want to show their willingness to comply with the requests of the authorities. However, the muted reaction on behalf of the regulator might be a careful way to avoid a potential negative future impact on the economy. China remains the world’s mining leader, with the biggest processing capacity, and will most likely wish to keep its status in relation to the cryptocurrency market.

We should note that China only wants to ban exchange transactions, while the exchange of Bitcoin and other cryptocurrencies into yuan and dollars will only be complicated for the Chinese. Liquidity will likely flow into other countries where authorities have softer regulation and the local economies do not show great levels of volatility.

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Still, it looks like the Chinese government wants to demonstrate its capabilities in avoiding negative effects on the financial markets. According to Charlie Lee, the creator of Litecoin, the representatives of the biggest exchanges are meeting with the regulator today and the market participants would wish for the most favorable outcome following yesterday’s crash.

Meanwhile, Bitcoin is currently trading around $3561.93 (-3.37%), Ethereum at $244.16 (-3.81%), Litecoin at $49.34 (-5.16%), Monero at $91.32 (-9.77%), Zcash at $166.12 (-7.53%), Ethereum Classic at $9.69 (-9.1%), and Bitcoin Cash at $411.07 (-3.73%).

The cryptocurrency market received much criticism from officials, central banks, and security services in the past few weeks, while in the last two weeks its summary capitalization fell by 30%. Bitcoin, the ‘benchmark’ currency, appears to be in a trade aisle between $3,000-$3,5000, unless positive news or different speculations are to emerge in the near future.

This article is written by FxPro

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