Bitcoin is trading around $42 thousand after falling to $ 40 thousand with the declining risk appetite in global markets and investors approaching safe havens.
Cryptocurrencies continued their losses amid concerns that China's Evergrande's debt crisis would affect the entire financial system and waning global risk appetite. Bitcoin fell 7.6 percent in Asian transactions to $ 40,237, the lowest level since the beginning of August. Ethereum also fell below $3,000 again.
As investors focused on the risks arising from the Evergrande debt crisis and the Fed meeting, the concerns in the markets were also reflected in cryptocurrencies. The S&P 500 Index lost 2.9 percent on Monday, its biggest drop since October 2020. Shares in the Asia Pacific region also fell in Tuesday's trading as investors continued to follow the news feed on the Evergrande crisis.
Although Bitcoin does not generally move in the same direction as traditional financial markets, it has been positively correlated with the Nasdaq 100 since February 2020. Analysts say that it will be a tough week and Bitcoin can be pulled below $ 41 thousand.
Ether's steeper decline than Bitcoin is also seen as another sign of increased risks in crypto markets. El Salvador President Nayib Bukele said that the country continues to buy Bitcoin from the bottom and they have increased the number of Bitcoins to 700.
Evergrande problem continues to make its impact
An important corner will be taken this week in the debt crisis that threatens the financial system of Chinese real estate giant Evergrande. Evergrande, which has more than $300 billion in debt, has to pay interest on its two bonds on Thursday.
The value of the traded bonds and bills of the real estate giant, which has already fallen behind in bank loan repayments, is also decreasing.
A bond of Evergrande dropped as much as 30 percent of the issue price in transactions, indicating strong bankruptcy risk. Although China poured $14 billion in short-term cash into the financial system on Friday, concerns about the spread of Evergrande debt risk dominate the markets. While the shares of Chinese real estate companies fell with Evergrande, the yield in the dollar-denominated private sector bond index below the investment grade reached the highest level of the last 10 years with 14 percent.