"57 injured people brought to our hospital. Over 30 have been admitted," Italian non-governmental organisation Emergency announced on Twitter.
There was no immediate claim of responsibility.
Initially, the Taliban Interior Ministry reported 10 people had been wounded in the blast, adding it had occurred when a thief threw a hand grenade in order to steal money.
Since returning to power, the Taliban have been routinely under-reporting security incidents in Afghanistan and often dismiss them as robberies and kidnappings.
Pictures on social media showed the floor of the market stained with blood, injured people being taken to hospitals and people fleeing.
As the weather is getting warmer, the number of security incidents are increasing in the war-torn country controlled by the Taliban.
In addition to the threat of the Islamic State terrorist organisation, several armed groups, mainly formed by anti-Taliban figures and former government security forces, are vying for power.
Late on Saturday, the Islamic State claimed responsibility for two bombings that occurred in Herat and Kabul provinces in the past two days.
Two people were injured in a roadside bomb explosion in Kabul's Police District 5 on Saturday that was reportedly targeting a Taliban vehicle.
At least four people were killed and 25 others injured in twin blasts at a playground in a Shiite-majority area in Herat province on Friday.
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