What started off as a bullish weekend quickly turned sour as excitement over strong technicals was tempered by news surrounding one of the world’s largest real estate developers. The following is a brief look at these events, and how they affected markets over the weekend.
As an employer of more than 200,000 people, Evergrande is a behemoth of a company – in fact, it is in the top 500 globally. It is primarily known as a real estate developer, with a presence in hundreds of Chinese cities. This means that when hit with hard times, the effects will be felt by entire markets.
This is exactly what has happened over the past few days, as fears ramped up over the potential for Evergrande to default on interest payments due, totaling over $100,000,000. Not only did the world of digital assets act on growing FUD, but so did traditional markets as well.
Turmoil is often welcomed though, as many look forward to taking advantage of opportunities like this, likening the market activity to a ‘sale’ on assets. Within digital assets, the most common phrase thrown around is to ‘buy the dip’ – something just done by none other than El Salvador.
This is unfortunately a situation without a simple resolution. While those with the means may be able to capitalize and ‘buy the dip’, the remaining digital asset enthusiast may simply need to weather the storm – something most have become good at over the tumultuous past few years.
Unfortunately for BTC, the timing of this broader market drop may turn an anticipated golden-cross in to nothing more than a blip. While over the years such an event has typically led to massive gains in the following weeks/months, there are also instances where they have been invalidated by unforeseen world events. This most recently occurred in mid-2020 when a golden cross was formed, only to be followed up with the global pandemic –resulting in a lengthy down-market.
If BTC can weather the current FUD plaguing markets, history has shown that big gains are on the horizon – this however is a big ‘if’.
In the closing hours of the weekend, BTC and the overall digital assets market saw a hearty drop. BTC in particular saw a roughly $2000 decline in price over less than 1 hour.
While many believed that the weekend would bring, at worst, sideways movement, few saw a drop of this size occurring mere days after the formation of a golden cross. Moving forward, all eyes will be on the situation evolving around Evergrande, and whether BTC can maintain its strong support in the low $40,000 range.