Speculators are claiming that the Chinese are spreading FUD in order to buy low. Let's hope they're right and that this isn't going to be a full out ban by the Chinese government.
Imho: there will not be a ban, but a strong regulatory context put in place. Maybe 50% of the Chinese exchange will have no other choice but to close for good. The rest will certainly have to close for a limited period, in order to make sure they can comply.
The result is: uncertainty on the Chinese market is leading to a massive withdraw of funds, hence a BTC price going down.
Most of the purge has been done from $3700 to $3200. Now it is time for the "average joe" (or average Wang) to wake up and withdraw his coins: People have no choice but to exit in order to avoid the risk of spoliation. (China = 30% of trading volume on BTC)
That is why we should see a rally towards $2,800 soon... I believe.
Once there... the purge is, again IMHO, done, and we can start again on solid grounds. Back on $3,000 thanks to the Westerners buying low... etc...
Some Chinese investors will hold their BTC on paper wallets, others will cas out... until the regulatory context becomes clearer.
Then we will all wait for a new announcement from the PBOC or exchanges regarding compliance to regulations.
Once done, we are back on track, and ready to hit $6,000 by the end of the year. EASY.
