Bitcoin has smashed through the $65k mark. At press time, BTC was worth $65,853. Speculators are on a high, as optimism swells around China’s economic stimulus.
China, trying to jolt its economy back to life, hinted at more economic aid over the weekend, but still didn’t spill the beans on how much cash it’s really going to inject.
Economists aren’t exactly clapping. They’re unsure if Beijing is doing enough to counter deflation, and China’s once roaring stock market seems to be faltering.
Adding to Bitcoin’s run, news of Mt. Gox pushing back creditor repayments until 2025 has eased concerns of a sudden flood of liquidity hitting the market.
This delays about $2.9 billion in repayments, according to Arkham Intelligence, giving Bitcoin some breathing room. If those repayments had gone ahead sooner, the market could’ve been swamped by sellers, dragging prices down.
Institutions are also stepping back after a bit of a break. Following three days of outflows from U.S. spot Bitcoin ETFs, there was a strong inflow of about $253.6 million on October 11.
Despite all the action though, Bitcoin hasn’t moved much overall for the month. Historically, October has been a great time for the market, delivering an average 20% boost over the past decade.
But thanks to intense geopolitical uncertainties, and several economies doing terribly all at once, plus Bitcoin’s tight correlation to stocks has hindered this Uptober from happening. For now.
Back to China. The world’s second-largest economy is still struggling to shake off the economic drag from the pandemic, and the mixed response to its latest stimulus measures is making markets jittery.
The People’s Bank of China (PBOC) unveiled a massive liquidity injection of 1 trillion yuan (about $137 billion) and slashed mortgage rates for existing loans. But the big question remains, will this be enough?
While China hopes for a GDP growth of 5% in 2024, analysts aren’t convinced, even as Goldman Sachs recently tweaked its own forecast to 4.9%.
The government is trying to avoid a repeat of the 2008 crisis when they threw 4 trillion yuan at the problem, only to create more debt and industrial overcapacity.
This time, they seem to be going for a more targeted approach, but the markets don’t seem convinced. Oil prices have also dipped.
The MSCI index for emerging currencies dropped by 0.1%, with the South African rand and South Korean won among the losers.
On the technical side, Bitcoin’s charts are showing some promising signs. Key support levels are now sitting at $62,000, with second support at $56,000.
On the upside, resistance levels are pegged at $66,500 and $73,777. Bitcoin is trading within a Descending Channel pattern, but if it breaks through that first resistance level with solid volume, it could be off to the races again.
The moving averages are also bullish. The 50-day moving average sits at $60,764.54, while the 200-day average is at $63,415.53. Bitcoin is above both, meaning the bulls are in control.