Bitcoin (BTC) jumped after a second retest of $ 40,000 on September 22, when China allayed global market concerns about Evergrande.
1-hour BTC / USD candlestick chart (Bitstamp). Source: TradingView
China Supports Evergrande Cash Injection
Data from Cointelegraph Markets Pro and TradingView showed that BTC / USD surpassed $ 42,000 on Wednesday, while bulls continued to uphold the psychologically important $ 40,000 mark.
Trader sentiment was still high, but the macro continued to provide conflicting messages, while concerns focused on China and the delta variant of the coronavirus.
Evergrande, China’s second-largest real estate giant, will default on hundreds of billions of dollars in debt. As a result, China’s central bank, the People’s Bank of China (PBOC), poured another 120 billion yuan ($ 18.6 billion) into the banking system.
This, in turn, calmed worried markets, and the potential collapse of the company came to be seen more as a state-controlled “slow explosion” than a chaotic event with far-reaching consequences.
However, analysts believe that the entire spectrum of China’s “Lehman Brothers moment” should be the driver of the market, at least in the short term.
“In the coming weeks and possibly the next few months, Evergrande, along with the FOMC, delta variable and a host of other issues, will continue to generate significant volatility, and to some extent volatility will become a buying opportunity,” said Vasu Menon. According to Bloomberg, Chief Investment Officer of OCBC Bank Wealth Management in Singapore.
In Europe, Evergrande shares jumped about 25% at the open in Frankfurt.
All eyes on the weekly BTC close
For bitcoins, which traded in parallel with global equities earlier this week, expectations were similarly volatile in the shorter time frame.
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A trader and analyst at Rekt Capital estimated the need for a weekly close above the 21-week exponential moving average (EMA) at just under $ 43,000.
“This should give us a big boost,” he said in his latest YouTube update.
The 21EMA bailout will also keep the demand zone close, as well as paint the trip to $ 40,000 as a “fake crash” and fill buy orders before bitcoin rallies.
Meanwhile, Pentoshi points to a slightly lower level, $ 40,700, as a tipping point for the close of the week.
“This site is of great historical importance and is critical to close this week,” he tweeted.