Bitcoin rallies after briefly edging under $40k support

22 Sep 2021

Bitcoin rallied from a second retest at $40,000 on Wednesday as China alleviated global market concerns over property developer Evergrande.

According to data from Cointelegraph Markets Pro and TradingView, BTC/USD was trading above the $42,000 mark on Wednesday, with bulls continuing to defend the psychologically important $40,000 mark.

The second-largest Chinese property giant was still earmarked for default on debt worth hundreds of billions of dollars. As such, China’s central bank injected 120 billion yuan ($18.6 billion) into the banking system.

This calmed the markets down, with the developer’s possible collapse thought to be a “slow detonation” rather than a tumultuous event with widespread consequences.

“In the next few weeks and perhaps in the next couple of months, Evergrande coupled with FOMC, the Delta variant and a host of other issues will continue to create great volatility and to some extent that volatility will be a buying opportunity,” Vasu Menon, executive director for investment strategy at Singapore’s OCBC Bank Wealth Management, said to Bloomberg.

Evergrande shares fell by close to 25% in Frankfurt in morning trading.

Moreover, the outlook for Bitcoin was just as irregular in shorter time periods.

According to crypto trader and analyst Rekt Capital, a weekly close for the world’s largest cryptocurrency above the 21-week exponential moving average (EMA) at just below $43,000 “would give us a lot of bullish momentum.”

He added that regaining the 21-week EMA would also maintain a close demand zone and indicate the move to $40,000 as a “fake breakdown,” filling purchase orders before the Bitcoin price rose.

Another crypto trader, Pentoshi pointed to a marginally lower level, at $40,700, for the weekly close.

He said on Twitter: “This location has a ton of historical importance and is crucial for this week's close.”