Bitcoin traded lower on Monday, September 20, down 8.95% on the day. A US dollar rally was sparked by default fears surrounding Chinese developer Evergrande. The company, with debts exceeding $300 bln, has fallen behind on payments of bank loans, as well as payments to suppliers and investors. In the upshot, investors piled into defensive assets.
As regards the FX market, the situation stabilized at the beginning of the North American trading session. The S&P 500 index plunged 2.2% to 43,05.91. By the close of the evening session, the benchmark recovered 1.27%.
The cryptocurrency market came under pressure ahead of the opening of the APAC session on Tuesday. Sellers took advantage of the thin market, pushing price action 6.5% down to $40,200. As a result, the price plummeted 17.7% from the top of $48,843 and rebounded 8.1%.
Bitcoin recovered its morning losses by tapping into a weakening dollar and heightened risk appetite in the FX market. Market participants are closing long positions in the greenback ahead of the Fed's decision on interest rates and stimulus programs on Wednesday.
The dollar has been on a downward trajectory in European trading. US index futures are trading in positive territory. If the positive trend on the benchmarks remains unchanged, Bitcoin buyers will gain a foothold above $44k. Given the current rebound, a daily pinbar is shaping up, but the session is not over yet, and we do not know what the Fed’s decision will be or how Jerome Powell's press conference will go. The volume profile shows support pegged at $37,800.