Once Mighty Bitcoin Suddenly Turning Bearish

Bitcoin prices tumbled this week amid a flurry of negative news in the cryptocurrency space, including reports that China is planning to shut down domestic cryptocurrency exchanges.

Bitcoin prices are now down more than 20% from the record high of $4,969.00 set on September 2, pushing into what market analysts would traditionally label as a bear market.

Even with those losses, bitcoin prices have still almost quadrupled in value since the start of the year.

The cryptocurrency market has been hit by reports that China is planning to shut down domestic cryptocurrency exchanges after it introduced a ban on initial coin offerings.

The National Internet Finance Association of China on Wednesday warned that bitcoin and other virtual currencies lacked a clear basis for value, and was a tool of money laundering, drug trafficking and smuggling.

Meanwhile, JPMorgan Chase Chief Executive Jamie Dimon said this week that bitcoin "is a fraud" and will blow up. It's uncertain to what extent Dimon's comments were responsible for bitcoin's selloff this week. But they certainly added to a bearish mood that's been growing since China began cracking down on cryptocurrencies.