Bitcoin dropped to a low of six weeks on Tuesday, as investors considered warnings made by regulators and reports of a big crackdown in China’s cryptocurrency market.
Other big digital currencies for example Ethereum and ripple are also seen dropping considerably. According to one analyst, Ethereum was trading down over 18% at $1.090 during the past 24 hours, while Ripple dropped close to 25%.
The bitcoin price fell to less than $12,000 and has not done that since December 5, showed data released by CoinDesk. It dropped by 10% in just over an hour early Tuesday morning.
On Monday, it was reported that China authorities made plans to block access domestically to Chinese as well as offshore cryptocurrency platforms which allow centralized trading. China regulators are also going to target those people and companies providing settlement, market-making, and clearing services.
The digital currency reached as high as $19.333 in December, but since has gradually declined. Futures contracts of bitcoin were introduced last month for just the first time, with huge derivatives operators Cboe and CME letting investors bet on movements in price for just the first time with this volatile currency.
Cboe’s futures for bitcoin for January of 2018 were trading Tuesday at $12,080, down over 12% from the session, at the same time, CME’s contract sat at $12.040 down over 13%.
The pullback appears, said a market analyst, to be due to a lack of Asia buyers. South Korea and Japan usually are dominating the market but over the past few days, their volumes have dropped steadily. On Tuesday, the combined volumes for both dropped to less than 30%.
He said that Japanese and Koreans are used to paying 20% premium or more per coin.
CoinMarketCap removed exchanges from South Korea recently from its price calculations because of extreme divergence in the prices in comparison to the rest of the globe.
Reports out of South Korea said the government there was preparing a measure to ban trading on exchanges of Cryptocurrency last week that sent the price of bitcoin down sharply.
However, recently the government has pulled back off its status and Monday said it would make a final decision on moving forward after more consultation.
The reports have not helped said another analyst, but in his assessment the market in Asia is upset about paying such premiums.