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Bitcoin pulls back on news of Evergrande default

Bitcoin pulls back on news of Evergrande default

Last updated 29th Jun 2022
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In the past 24 hours, Bitcoin faced a pullback below $65,000, a decline of over 4% after passing $69,000 for the first time on Wednesday during US trading hours. Ethereum is also down. The second-biggest crypto by market cap lost 3%, falling to about $4,600, CoinDesk wrote.

The pullback resulted from news that China Evergrande Group failed to pay interest on bonds issued by the corporation to some international investors, raising further concerns about a potential default. According to a press release published on AP News:

China Evergrande Group today again defaulted on interest payments to international investors. The DMSA (German Market Screening Agency) itself is invested in these bonds and has not received any interest payments until today’s end of the grace period. Now the DMSA is preparing bankruptcy proceedings against Evergrande and calls on all bond investors to join it.

Third default for Evergrande

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The second biggest real estate developer in China defaulted on two bond interest payments in September. The grace period ended in October. Just before it did, rumors about alleged interest payments surfaced, which misled the public. They were also taken at face value by the international media. 

New ATH was a reaction to US CPI

This week, the US Consumer Price Index reached new heights, achieving a record for the past three decades. Bitcoin’s new all-time high was perceived as a reaction to this. According to data collected by CoinDesk, strong trading volume didn’t support Bitcoin’s rally. In fact, trading volume was higher on Monday and Tuesday than on Wednesday.

According to David Morris, the struggling Chinese real estate developer has been a critical influence not only on crypto, but on the financial market in general. Investors are advised to watch how Asia’s crypto markets react today against the backdrop of concerns about Tether’s holdings of Chinese debt.

Support for Bitcoin between $63-$65K

At the time of writing, Bitcoin was changing hands at $64,683. In the past 12 hours, charts showed warning signs of upside exhaustion, resulting in a brief price drop. The RSI (relative strength index) kept hovering near short-term overbought levels.

Upside momentum signals are improving

On the daily price chart, upside momentum signals are getting better for the first time since October 1, in advance of a price rally from $44,000. This indicates that buyers might stay active on pullbacks. Additional upside targets would be yielded by two consecutive daily closes above an all-time high, toward $86,000 at first.

Daniela Kirova

Daniela Kirova

Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.