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Chinese real estate giant Evergrande Group is facing a major financial crisis and recently announced restructuring plans. This situation caused a 24% drop in the Asian market earlier today, causing significant concern. Bitcoin, which has been mostly moving sideways throughout the past week, is currently trading at $26,097 with a 1.86% decrease. Experienced cryptocurrency analyst WhaleWire warned that developments in Evergrande Group could potentially affect the price of the crypto king.
Evergrande Crisis and Tether (USDT)
The main factor behind the direct impact of developments in Evergrande Group on the cryptocurrency market is speculation that Tether, the largest stablecoin supported by USDT, serves as the primary commercial paper source. Despite Tether repeatedly denying this claim, its silence regarding the disclosure of commercial paper assets continues to cause confusion. Given past transparency issues, it is understandable that investors are currently being cautious.
Additionally, Tether has a significant impact on the price of Bitcoin, which is responsible for approximately 70-80% of the trading volume and is often accused of artificially manipulating prices. Cryptocurrency analyst WhaleWire emphasized the need for caution due to the potential of the imminent Evergrande crisis to affect the price of Bitcoin.
Evergrande Crisis Could Lower Bitcoin Price
As mentioned, the Evergrande crisis is expected to potentially affect USDT liquidity and thus put pressure on the price of Bitcoin. Many market experts are discussing the possibility of the crypto king’s price dropping to $20,000, pointing out the weakening trading volume. Additionally, the increase in short positions in Bitcoin options towards the end of last week also supports this possibility.
On the other hand, experienced cryptocurrency analyst Rekt Capital made a contradictory comment, suggesting that Bitcoin could rise to around $29,200. However, the analyst also added that this could be a relief rally before the price of Bitcoin drops further.
Furthermore, many analysts believe that a rally will begin in October due to historically positive fourth quarters for Bitcoin. Cryptocurrency analyst Rekt Capital stated that considering the striking similarity between market conditions in 2023 and 2019, there is a high probability of a similar price movement in October this year.
In October 2019, Bitcoin only experienced a modest 10% increase. If the crypto king follows a similar price movement to October 2019 in 2023, it could reach a price level of around $29,200.
