Bitcoin price tumbles as Evergrande news causes global financial panic
In the last 48 hours, Bitcoin’s price tumbled to relative lows, with the digital currency now showcasing monthly losses of approximately 15%.
- China’s Evergrande Group has reportedly defaulted on two of its largest loans, with regulators seeing no way for the firm to clear its outstanding debts anytime soon.
- Yesterday’s crash saw 29 of the top 30 cryptos by total market cap register losses.
- Galaxy Digital’s Mike Novogratz believes that as long as Bitcoin (BTC) stays above the all-important $40K resistance, there is no reason for investors to worry about the asset.
The last 48 hours have been a roller coaster ride for Bitcoin. The world’s largest cryptocurrency shocked everyone by slipping to around the $40K mark, albeit momentarily. As a result, the flagship digital asset is now exhibiting weekly losses of 10.5%. At press time, BTC is trading for $43,312.
This fresh round of liquidations coincides with emerging news of China’s mega-property development firm Evergrande Group being under a whopping debt of +$305 billion, resulting in panic selling across various global markets. Pundits believe that the only way for the company to get back on its feet now is if the Chinese government intervenes.
On a more technical note, yesterday’s crash comes after BTC booked profits over 80% after hitting a local bottom of $29,300 on July 20. Not only that, yesterday’s onslaught saw 29 of the top 30 crypto assets by market cap suffer substantial 24-hour losses.
Lastly, as per the crypto Fear & Greed Index, which serves as an indicator of the prevailing market sentiment, the bearish price action of the last 36 hours comes at a time when the market seems to be exhibiting “extreme fear.” However, just 30-odd days ago, this metric lay on the opposite end of the spectrum, signaling “extreme greed.”
Bitcoin in “good shape” if it stays above $40K, expert suggests
In a recent interview, crypto investment firm Galaxy Digital CEO Mike Novogratz stated that he believes there is no reason for investors to fear Bitcoin unless the currency falls below the all-important $40K psychological threshold. “I think the market got itself a little too long – the China news scared people. I see nothing but engagement and activity from our investing clients and our corporate clients,” he added.
However, not everybody is convinced about Bitcoin’s utopian, decentralized future. Ray Dalio of Bridgewater Associates recently stressed that Bitcoin is a financial instrument that only has “perceived” value rather than intrinsic value. He further added that regulatory bodies around the globe have the power to stifle the industry if they so choose, contrary to what many crypto maximalists claim. That being said, over the last few years, Dalio has changed his outlook towards BTC considerably, even adding the flagship crypto to his portfolio.
Disclosure: The author owns a range of cryptocurrencies at the time of writing