Bitcoin fell as much as 9 percent on Monday as recent volatility in the cryptocurrency market showed no signs of abating.
Market players pointed to poor liquidity and an expanding crackdown in China against bitcoin mining.
And thedecreased Bitcoin to $32,288, its lowest level in 12 days, and the last drop of 7.5 percent. If it continues, the decline will be the largest in about a month.
Authorities in southwestern Sichuan Province on Friday ordered the closure of crypto-mining projects.
The State Council, China’s cabinet, pledged last month to crack down on bitcoin mining and trading as part of a series of measures to control financial risks.
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The crackdown on Chinese miners could mean that China wants to sell coins in a weak market and drive the price down. Bitcoin production in China accounts for more than half of global Bitcoin production.
Sichuan is the second largest bitcoin mining province in China, according to data compiled by Cambridge University.
Some miners move production there in the rainy summer to take advantage of the rich hydropower resources.
The authorities in Sichuan have ordered the closure of crypto-mining projects in the main mining hub.
Other popular mining regions, such as Inner Mongolia, have cited the use of crypto-mining for electricity generated from highly polluting sources such as coal in requests targeting the industry.
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The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau have issued a joint notice calling for the closure of 26 suspected crypto-mining projects.
The notice orders Sichuan’s state electricity companies to carry out inspections, make corrections, and report their results. And they should immediately stop providing electricity to the crypto projects they’ve discovered.
Authorities have urged local governments in Sichuan to start combing and shutting down crypto projects. New projects are banned.
Typically, companies that mine Bitcoin keep large stocks of the cryptocurrency, and as a result any moves to sell in large quantities drive prices down.
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Bitcoin has fallen by more than a fifth in the past six days. It is down by half from its April peak of $65,000. However, it has gained more than 10 percent this year.
Additionally, Ethereum, the second largest cryptocurrency by market capitalization that tends to move in tandem with Bitcoin, is down as much as 12 percent.
Ethereum fell below $2000 for the first time in about a month. The last drop was 10 percent at $2,025.31.