Evergrande effect leads bitcoin to record strong devaluation | finance

the quotation of cryptocurrencies had strong fall this Monday (20), caused by instability in the markets due to the possibility of collapse gives Chinese real estate giant Evergrande. O bitcoin closed the day with a drop of 8.1%, quoted at US$ 43,743 on New York stock exchanges, and reached the apex of the fall earlier, with a devaluation of 10.7%, sold at US$ 43,000, the lowest price since August.

In addition to the popular bitcoin, the cryptocurrencies of the so-called decentralized finance platforms (DeFi) operated with the greatest devaluations. Cardano and Dogecoin registered a 10% drop in market value, while the Polkadot had a 16% drop, according to the portal CoinMarketCap.

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Market value losses followed the tone of the international market, while investors weighed the risks of a possible default from Evergrande, with debt estimated at US 300 billion, and the outlook for the monetary policy meeting of the Federal Reserve, equivalent to the US Central Bank. The S&P 500 index closed down 1.7%, the worst result since May, and European stocks had the biggest drop in two months.

The rapid fall in the markets is expected to accelerate as more than 272,000 investors had their accounts settled in the last 24 hours, equivalent to US 1.3 billion in cryptocurrencies, according to the platform Bybt.

“This is part of a well-established pattern as investors sell riskier assets to cover margins and/or stay on the sidelines until markets calm down and they feel more comfortable returning to riskier positions,” says Valkyrie CEO Investments, Leah Wald.

Bitcoin is expected to test its 100-day change average, which currently stands at $40,655, and could drop to $40,000. However, the currency dropped to lower levels in the Trading Envelope indicator, which suggests that the devaluation was very sharp and sharp.

Although bitcoin does not always trade together with financial markets, its correlation in monthly valuations in Nasdaq, the New York Stock Exchange, has been positive since February 2020. Indicators show that cryptocurrency and markets are behaving similarly.