Evegrande bankruptcy – The market is as fearful as it was in May

Evergrande company goes bankrupt, crypto market falls

The crypto market is mostly red due to the influence of the Evergrande company news. Bitcoin fell to around $ 47,000 last day. The majority of altcoins are falling in line with the BTC trend.

The unemployment report shows that the number of people receiving unemployment benefits is at its lowest level in 52 years. This is good news for financial markets, but US stocks are still falling.

The rating agency Fitch Ratings has downgraded Evergrande’s company and subsidiaries to “Restricted Default”, which means that the company has failed to meet its financial obligations. As defined and referred to by Fitch, a company that has an unsecured debt settlement but has not yet entered bankruptcy, liquidation, or other formal closing process.

Fitch said the downgrade reflected the company’s inability to pay interest due earlier this week on two dollar-denominated bonds. The payments were due a month ago and the grace period expires next Monday. Evergrande made no announcements about the payments or responded to questions from the rating agency during this time.

Evergrande has total debt of approximately $ 300 billion. Analysts have been concerned for months about whether or not a default could spark a wider crisis in the Chinese real estate market that could harm homeowners and the entire financial system. The US Federal Reserve warned last month that problems with Chinese real estate could weigh on the global economy.

According to this information, Evergrande either did not respond or did not respond. And earlier this week, China’s central bank also prepared $ 188 billion to pump it into the market in the worst case scenario.

The reactions and fears of investors were reflected in the stock indices. The more investors in the traditional financial market are currently participating in the crypto market, the greater the influence of the trend.

On-chain situation

Bitcoin was corrected to around $ 48,000, the Bitcoin win rate dropped to 73%. This is in line with the price Bitcoin hit in May, when BTC tumbled from its high to $ 37,000.

The Fear and Greed Index is currently showing the fear mood at 24, around the same time as the May BTC price drop.

A proportion of the amount of BTC stored represents a difference from May. Currently, the price of BTC has gone down, but the amount of BTC stored has increased. In May, the price fell, but the amount of BTC stored also decreased, which means that the amount of BTC circulating in the market increased (red line).

With this, Bitcoin continues to leave the ground on the stock exchanges. In contrast to May, the price fell and the amount of BTC on the exchanges increased.

The BTC amount paid into the exchange on the previous day and on the last day is higher than the amount withdrawn from the exchange. The amount of BTC that is being pushed onto the retail floor is believed to be the cause of the decline in BTC price.

The amount of BTC is pushed to both regular exchanges (spot) and derivatives exchanges. However, the data shows that the bulk of BTC is being crowded on derivatives exchanges.

Most of the recent slumps, panic and selling have come from short-term investors. The Short-Term Holder Index shows that there are times when short-term investors (BTC storage less than 155 days) accept a sale at a loss. Long-term investors hardly react.

In general, long-term investors are still accumulating BTC despite the decline in BTC price. On-chain indicators have yet to show signs of a market high. Most of the selling power came from short-term investors. Perhaps the correction will help BTC pile up for the next rally.

Some other information:

• U.S. lawmaker Marie Newman has announced that she has purchased up to $ 50,000 in crypto through shares in the Grayscale Bitcoin Trust. Congressman Newman bought between 15,001 and 50,000 GBTC, according to a financial report filed with the US House of Representatives last Wednesday. In addition, she made four single purchases of Coinbase Global Class A shares between November and December, valued at $ 215,000.
• Florida Governor Ron DeSantis has proposed a program that would allow Florida companies to pay state fees in bitcoin and crypto, along with other crypto-related proposals to be included in the state budget for the year. The move is an attempt to attract more Bitcoin investments to Florida.
• Amazon has invested in the sports collector’s card distributor Dibbs. Dibbs is powered by the WAX ​​blockchain, which the company uses to generate NFT tokens for its collector tokens for sale on the marketplace. Investing in Dibbs is an indirect way that the Amazon company is investing in the crypto market.
• Microsoft is investing 27 million US dollars in the crypto startup Palm NFT Studio to Series B. Palm NFT Studio is a start-up on Ethereum’s 2nd tier platform that enables the convenient development and provision of tranches for large-scale NFT reduction in the Palm network enables.
• The meta-company WhatsApp has implemented the cryptocurrency trading technology directly in this application via the Novi wallet. This is a wallet made by the Meta company (Facebook).