China’s real estate giant Evergrande Group has come under major financial distress and recently announced its restructuring plans. This resulted in massive anxiety in the Asian market during Monday’s early trading hours resulting in a 24% drop in the Asian market.
Bitcoin has also been showing sideways movement over the past week with the BTC price shedding another 1.70% and moving to $26,106 with a market cap of $508 billion. Popular analyst WhaleWire explains that the developments at Evergrande Group could influence the Bitcoin price.
There is ongoing speculation that Evergrande could serve as a primary source of commercial paper supporting Tether’s stablecoin. Despite Tether’s repeated denials, they remain reticent about disclosing their commercial paper holdings.
Given their past lack of transparency, it’s understandable that investors are cautious. It’s akin to offering a guest a sandwich while loudly insisting it contains no tainted horsemeat.
Furthermore, Tether has a significant impact on Bitcoin, responsible for approximately 70-80% of its trading volume and often employed to artificially manipulate its prices. With the looming Evergrande crisis potentially affecting Bitcoin, exercising caution is advisable, the analyst writes.
Evergrande Crisis Can Push Bitcoin Lower
As said, the Evergrande crisis could potentially impact the USDT liquidity thereby putting pressure on the Bitcoin price.
Several analysts have already been talking about the probability of the BTC price sinking to $20,000 amid weakening trading volumes. Also, during the last week’s expiry, the put calls for Bitcoin options were on the rise.
The popular crypto analyst believes that Bitcoin could see a surge to $29,200 levels. However, the analyst adds that this could be a relief rally before Bitcoin heads downwards even further.
Also, many analysts believe that Bitcoin could start its rally from October 2023 onwards as Q4 has been historically positive for Bitcoin. but Rekt Capital explains that considering the striking resemblance between the market conditions in 2023 and those of 2019, it’s somewhat surprising that there hasn’t been more discussion about the possibility of experiencing a similar price movement in October this year.
Back in October 2019, Bitcoin witnessed a modest rally of just +10%. If the cryptocurrency follows a similar trajectory this October in 2023, it could reach a price level of around $29,200.
In such a scenario, it’s conceivable that BTC might create an extended upper wick, potentially breaching the Lower High resistance (yellow) before potentially retreating once more to validate the ongoing move as a relief rally.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
