The recent volatility in Bitcoin and the broader crypto ecosystem coincides with a significant sell-off in the Asian stock market in the early trading hours on Monday
Following a slight recovery from last Saturday’s massacre, the broader crypto market came under pressure again in early morning trade on Monday. As of the time of writing, the global cryptocurrency market is down 4.5 percent to $2.23 trillion.
Bitcoin and the top ten cryptocurrencies are down anywhere from 3 to 10%. However, Terra’s LUNA, which recently entered the top ten crypto-list, has corrected the most (18%).
The Asian stock market’s decline creates headwinds
The recent volatility in Bitcoin and the broader crypto ecosystem coincides with a significant sell-off in the Asian stock market in the early trading hours on Monday.
The Hang Seng index in Hong Kong has corrected more than 1.3 percent in the early trading hours, with tech stocks dropping higher. JD.com corrected by more than 5%, while Tencent corrected by more than 1%. Alibaba was the biggest loser on the Hong Kong index, falling by more than 8%.
Evergrande, a Chinese property developer, suffered an 11 percent drop in trading on Monday. Evergrande will almost certainly be kicked off the China Enterprises index. Evergrande announced in a report with the Hong Kong stock exchange that it had received a $260 million debt payback demand.
Japan’s Nikkei also fell 1%, while the Topix fell 0.79 percent. At the same time, the Kospi in South Korea was down 0.57 percent. This was enough to put further strain on the crypto space as a whole.
As we all know, the cryptocurrency markets have largely followed the movement of the stock markets. When there is uncertainty in the global market, investors want to move their funds to safe havens, which causes dips in the cryptocurrency space.
While some market analysts have advised investors to buy on the dips, it will be interesting to see if the current correction is long-lasting or short-lived.
