Cryptocurrency prices plunged Monday morning during a widespread market sell-off sparked by concerns of a potentially catastrophic debt default in China, pushing many of the world’s largest digital currencies to their lowest levels in more than a month.
once again the big reason behind it is China. It is being told that ‘Evergrande’ is a big real estate company of China and this company is buried under very heavy debt This company is one of the biggest companies in the world and is in the business of building on a large scale. There are many other companies associated with this company who have taken loans and invested in Evergrande’s projects and all of them are now in default. Evergrande has taken a huge amount of money from banks and now this company is not in a position to give back the money. In such a situation, the bankruptcy of this company cannot be ruled out. If this happens then the stock market And the rest of the trade markets may come down further, including crypto. After Tesla, Evergrande’s problem could be more dangerous for bitcoin and crypto markets.
One of the major reasons why the crypto market is falling is also related to Evergrande itself. Some of Evergrande’s trading papers are held with Tether USDT, in return for which Tether has given some unsecured loans to Evergrande. Tether denied this news But it is one of the reasons why the crypto market is going down. The price will also go down.
There is also an advantage of this decline. The crypto market is once again very low. Bitcoin has come down to $ 40,000 and Ether has come down to $2900. The momentum shown by ADA and SOL in the past has also stopped and Both these cryptos have also come down very low. Crypto understanders are taking advantage of this decline. No one knows how much the decline will be, but in the meantime buyers are making their purchases. The biggest name is El Salvador politician Naib Bukele. , who told in a tweet yesterday that his country has bought 150 more bitcoins and now El Salvador has 700 bitcoins to hold.
Bitcoin itself is now looking shaky from a technical standpoint. Dropping into the $44,000 range broke a multi-month technical uptrend, says Michael Boutros, a technical strategist with DailyFx.com. Even if it rallies to $47,000, it would have to close slightly higher to breach technical resistance at that level.
“As long as it’s below $47,000, the risk is for another low,” he says. The next level to buy would be $41,900, and if it falls down to $38,777, it would be the “buy of the year.”
One other note is that Bitcoin’s technicals are looking similar to the S&P 500, which is also breaching support levels, says Boutros.
Cryptos may be facing their stiffest test in years if a wave of contagion ripples through financial markets. So far, they’re failing.
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