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Bitcoin before free fall? Analysts fear panic selling

Investors: increasingly choose US dollars instead of Bitcoin. (Photo: Varga Jozsef Zoltan / Shutterstock)
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The uncertainty surrounding the Chinese real estate company Evergrande is also putting pressure on the crypto market. With Bitcoin, panic sales could cause further price drops.

The fear of a possible bankruptcy of the real estate developer Evergrande from China and the consequences on the national economy of the country as well as other markets has also reached the crypto sector. After a minus of eight percent to below 43,000 US dollars on Monday, the Bitcoin price fell to 40,500 dollars on Tuesday night. During the course of the day, the largest cryptocurrency recovered, but experts fear a further decline in the price.

Impending real estate crisis depresses the crypto market

The current bad mood in the financial markets affects the area of ​​crypto currencies as especially young asset class, according to market analyst Timo Emden from Emden Research. According to Emden, China could let the heavily indebted Evergrande group hit the wall and thus possibly trigger a global real estate crisis, so the fear. According to Emden, Evergrande is “on the verge of insolvency”, as it says in the Handelsblatt.

Accordingly, investors are currently trying to park their money in potentially safe asset classes. In addition to the US dollar, this also includes gold. Risky investment opportunities such as Bitcoin or other crypto currencies are currently rather unattractive. If the Bitcoin price should slide permanently below the mark of 43,000 dollars, according to Emden, there is a risk of new turbulence. On Tuesday evening, Bitcoin was around $ 42,500.

Bitcoin rate and Evergrande: panic reactions possible

An Evergrande bankruptcy and the one it triggered Stock market turbulence could lead to a panic reaction, especially among speculatively oriented investors, according to Emden. Adam Reynolds from Fintech Saxo Capital Markets, quoted by Handelsblatt, also expects “further liquidations”. Reynolds: “Bitcoin and Ether are being carried away by the risk-free dynamic that has increased since the end of last week.”

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Tyler Hromadka
Tyler is working as the Author at World Weekly News. He has a love for writing and have been writing for a few years now as a free-lancer.

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