Prices of cryptocurrency bounced off a month and a half lows Tuesday as a massive sell-off overnight tied to jitters about a looming loan default by property developer China Evergrande eased a bit, however investors expect more volatility.
Investors distressed by the financial woes of the Chinese real estate giant sent cryptocurrencies reeling, with bitcoin -- the largest and most popular cryptocurrency -- dropping by more than 7%.
Bitcoin was trading around $43,000 late Monday, bouncing back from a retreat to $40,191 earlier in the session. The crypto registered a four-month peak of $52,000 on September 6.
The impact of the spillover was felt across the global crypto trading floors. Based on data by CoinmarketCap, top payment networks like Ethereum, Cardano, Binance Coin, and Solana have all posted deeper losses than bitcoin in the past 24 hours: all shed at least 8% on the day.
Markets sold off Monday in the face of concerns about Evergrande's mounting debt burden, with one financial analyst warning there's more misery coming for anyone tied to the property giant.
"There is going to be a lot of pain; nearly everyone involved is going to get a chunk taken out of them, if not worse," China Beige Book Chief Executive Officer Leland Miller said in quotes by Yahoo Finance, Tuesday.
Markets around the world ushered in the week on a shaky note following worries Evergrande's troubles could set the stage to a fallout for the Chinese and global economies triggered a major selloff in riskier assets.
The drop in cryptocurrencies comes during a time when institutional interest in the sector has climbed and made it more widespread, with many investment groups taking a more bullish outlook.
An assessment by blockchain analytics platform Glassnode shows the seven-day moving average (MA) for the volume of bitcoin wallet addresses transferring funds to crypto exchanges has hit a three-month high, indicating growing selling pressure and speculative trading.
Meanwhile, Evergrande currently has more than $300 billion in liabilities, and some are not comfortable about the possible risks to the Chinese financial infrastructure and the so-called "global contagion" were the company to collapse.
