Several weeks of bullish progress reduced to nothing
This Tuesday, September 21, 2021, Bitcoin (BTC) falls to levels that we had not seen for several months. We thus begin this new day with a sudden drop in the price of virtual currency which reaches 40,200 dollars on Binance to the current low.
This represents a 15% drop from Monday’s high of $ 47,347 and the value the lowest Bitcoin (BTC) since early August.
The bears retain the advantage despite a momentary increase in buying strength last week, general sentiment is lower and the slide could continue.
What to expect for the rest of the day on September 21?
Following this fall, the price rebounded almost instantly and strongly before returning to the $ 43,000 area, thus starting the formation of a hammer on the daily chart and in H4. Such a pattern represents a strong signal of bullish movement to come.
This bull figure is also accompanied by another element that would corroborate the possibility of an upward correction, at least temporarily, after this sharp decline.
By observing the RSI on the H4 chart, we can notice a bullish divergence noticeable which leads us to believe that an upward surge is to come in the next few hours.
It can be seen that the RSI is also in an oversold position. A sign, coupled with the divergence, which adds to the list of positive elements showing that the return of the buying force is imminent.
Bitcoin (BTC) absolutely needs to hold the $ 40,000 support, if this level drops, sellers could take the price to the next low in the low zone. 38 000 dollars.
On-chain data still bullish
The short-term decline due to the risk of a global crisis has no effect on on-chain data, the general trend remains strongly upward. Long-term holders continue to hold their Bitcoins (BTC) and seem to see this as a good buying opportunity. Only newer BTC holders are participating in the downward pressure by selling in a market panic..
The graph below shows that miners’ reserves continued their upward trend throughout the year, which is a strong sign of accumulation.
In addition, spot trade reserves remain at their lowest level for several years.
The catalyst for the decline: Evergrande, the over-indebtedness crisis of a Chinese colossus
The new shock of the day that has the potential to lead to a major global financial crisis is of course the fall of the Chinese giant Evergrande.
the 2nd largest Chinese real estate group which is over $ 300 billion in debt and is collapsing today, threatening to take the rest of the global economy in its downfall, including the cryptocurrency industry.
In a statement released on Tuesday, Evergrande predicts “a continuing significant decline in contract sales in September, leading to a continued deterioration in the group’s inflows” and putting “enormous pressure on the group’s cash flow and liquidity. ”
The statement adds that given the difficulties, challenges and uncertainties associated with improving its liquidity, there is no guarantee that the group will be able to meet its financial obligations.
Behind these 300 billion in debt, many creditors would be in dire straits if the situation worsened.
And this is the crux of the matter, this debt is mostly held by the biggest Chinese banks as well as by big foreign investors. Bankruptcy would sink them in turn, causing a chain reaction with real danger to the health of China’s financial system.
There is hope for a resolution of this global financial crisis. Indeed, the concerns of investors are likely to be appeased according to several analysts who believe that theThe problem will likely be brought under control by the Chinese government before it wreaks havoc on the banking system, and is unlikely to lead to wider global financial contagion.
A new week that begins under the sign of the bears and a new setback for buyers who experience failure causing them to lose several weeks of bullish gains, bringing Bitcoin (BTC) to its lowest since early August. The direction of the virtual currency for the coming days is likely to depend largely on how the Evergrande crisis is resolved, in any case a lot of volatility can be expected as a result.