China, once again has stopped Bitcoin in its tracks.
It was all going so well! China, once again has stopped Bitcoin in its tracks. This time it wasn’t the press office, but a tweet from a German creditor, DMSA, claiming Evergrande, China’s indebted property developer, has missed a bond payment and therefore, wants to declare the group bankrupt. It is very difficult to know what is fake news, PR and real, but what is clear is that DMSA have chosen a path of fame over ‘let’s not try and end the world’s financial markets” - I’m 100% sure their analyst’s favourite movie is the Big Short.
So where does this leave Bitcoin? Cheap, would be my first answer. We have liquidations of leveraged longs top $700M.
But as you can see, it isn’t even the largest liquidation in the last 3 weeks. The worlds financial markets, who were too busy worrying about inflation, have had a swift reminder that the Evergrande issue will not just disappear, but we have become so accustomed to the art of kicking the can down the road, that even this little Tweet storm will quickly fade from memory.
Bitcoin briefly dipped below our key level of $64,890, as Twitter once again drove price action. The market has recovered, and BTC is sitting just above the key support level. Today’s close will be telling, should we finish north of $65,000, then nerves will calm and Bitcoin will retest resistance at $67,000 and the upper target of $68,150.
The bullishness that drove prices to a new ATH, has been replaced by measured concern over the realities of the world’s economy. But as we know, that doesn’t last for long.
Should we break below $64,890 this evening, then it’s probable the next stop is $61,750. Downside momentum will likely make this move a quick one, with increased sell-side pressure opening up the possibility of a move back below $60,000 and a test of the key support level of $58,850.
It looks like crypto isn’t correlated to traditional markets, at least not during this past session.
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