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Bitcoin Price Rises as Concerns Towards Chinese Crackdown Diminish

February 17, 2017 at 18:19 by Yahia Barakah

The price of Bitcoin rose above the $1,000 mark as the virtual currency appeared to be stabilizing over this price point. Investors became less concerned about the recent crackdown on Chinese Bitcoin exchanges due to a growing belief that the worst is over, which raised demand for the currency.

Bitcoin crashed by about 10% following announcements by major Bitcoin exchanges in China on February 9 that withdrawals will be halted due to pressures from the nation’s central bank. However, the digital currency recovered to pre-crackdown prices as demand in the West remained strong.

Blocking withdrawals drove Chinese investors away from Bitcoin on worries that funds places in the form of Bitcoins might not be recoverable. However, some traders found an opportunity in the withdrawal block, by buying locked Bitcoins at a cheaper price in a hope for a better price when the ban is lifted. The withdrawal ban announcements said that the ban will last for 30 days.

2017 so far proved to be a volatile year for Bitcoin prices. The virtual currency, which started the year by breaking the $1,000 milestone, quickly pushed higher than $1,100 by January 4, before crashing on January 6 to below $900.

Fears of an upcoming crackdown by the People’s Bank of China drove prices down about 24% in the first week of 2017. However, investors seem to have gotten used to negative announcements in China. Attention is instead moving to how the market will adjust to recent changes in Chinese Bitcoin regulations.

BTC/USD traded at 1054.8 as of 18:00 GMT on Friday, after touching 1063.0 at 14:35 GMT, the strongest level since January 4. BTC/USD started the day off at 1034.0.

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