Bitcoin before free fall? Analysts fear panic selling

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 declines.

The fear of a possible bankruptcy of the real estate developer Evergrande from China and the effects on the country’s economy and 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.

The current bad mood on the financial markets is particularly affecting the field of cryptocurrencies as a 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 is in the Handelsblatt called.

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. According to Emden, if the Bitcoin rate slips permanently below the $ 43,000 mark, there is a risk of new turbulence. Bitcoin stood at around $ 42,500 on Tuesday evening.

An Evergrande bankruptcy and the resulting stock market turbulence could lead to a panic reaction, especially among speculative 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.”