The week opened with news from China and South Korea that impacted the price of Bitcoin and other cryptocurrencies negatively. A Reuters report monitored on Thursday January 11 indicated that the South Korean government was considering legislation that would outlaw all forms of cryptocurrency trading. South Korean Minister of Justice, Park Sang-ki, gave this hint in a news conference. He further stated that “There are great concerns regarding virtual currencies and the justice ministry is preparing a bill to ban cryptocurrency trading through exchanges.”
Although the Presidential office released a counter statement in an apparent attempt at damage control, markets were spooked enough to send bitcoin prices plummeting. Furthermore, reports of raids on exchanges by police and tax authorities have not helped the situation.
Demand for Bitcoin in South Korea is a crucial driver of prices. Bitcoin prices dropped to just above the $13,000 mark. Bitcoin is particularly susceptible to declarations and actions from the central authorities in countries where demand is highest. Favorable statements from one end of the globe can easily be countered by contrarian actions elsewhere, causing wild swings in price.
So far, the trading floor of $12,500 has held firm despite the pronouncements from Asia, which pushed prices down towards this support level. The expectation for the week is for prices to continue to oscillate between this floor and the ceiling of $16,500 which has held firm since mid-December 2017. If there is any strong action in favor or against Bitcoin in some of the keystone countries, prices may push out of this band.
Bitcoin daily chart
Bitcoin 1h Supply & Demand Zones: