Bitcoin (BTC) price has moved over 3% lower today after the Central Bank of the Republic of Turkey (CBRT) banned crypto payments for goods and services in the country.
Fundamental analysis: Regulatory concerns
The central bank decision is a result of “irreparable” damage and transaction risks crypto assets can bring. It introduced new legislation and announced that cryptocurrencies and other blockchain-based assets are banned as a payment method in Turkey.
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The digital asset market has grown significantly in Turkey over past months as Turkish investors joined a worldwide rally in Bitcoin, searching for protection against lira depreciation and inflation, which hit as much as 16% in March.
The CBRT said in a statement that cryptocurrencies were “neither subject to any regulation and supervision mechanisms nor a central regulatory authority.”
“Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance,” the central bank said.
“Their use in payments may cause non-recoverable losses for the parties to the transactions … and include elements that may undermine the confidence in methods and instruments used currently in payments,” it added.
The move faced criticism from the main opposition party. Kemal Kilicdaroglu, President of the Republican People’s Party, condemned the bank’s decision. Just last month, Turkish President Recep Tayyip Erdogan fired the central bank governor.
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Technical analysis: Bitcoin corrects on news
Bitcoin price has slipped over 3% to trade below the $61,000 mark this morning. A correction comes just two days after the world’s largest cryptocurrency printed fresh record highs near the $65,000 mark after a blockbuster stock market debut of Coinbase.
Today’s move lower has also pushed the price outside of the ascending wedge, signalling a potential deeper correction in BTC price. The next support lower is the previous record high at $58,500. On the upside, the area around $68,000 – defined by the 161.8% Fibonacci extension line – is the next target for crypto traders looking to buy Bitcoin.
Turkey’s central bank banned the use of cryptocurrencies and other assets based on digital ledger technology as a means of payment in the country. Bitcoin price slipped over 3% on the news.