China Stimulus Package Can Push Bitcoin Price to New All-Time High

Coinspeaker
China Stimulus Package Can Push Bitcoin Price to New All-Time High

The world’s largest cryptocurrency Bitcoin BTC $64 247 24h volatility: 1.5% Market cap: $1.27 T Vol. 24h: $31.52 B is set to receive a major boost with China’s latest announcement of economic stimulus. Earlier on Tuesday, September 24, Chinese central bank PBoC announced its biggest stimulus since the pandemic to pull back the nation’s economy from the clutches of deflation and drive further growth.

The People’s Bank of China (PBoC) announced that it would pump $140 billion of liquidity into the economy. Besides, it also announced to cut the reserve requirement ratio (RRR) by a good 50 basis points.

Additionally, the Chinese central banks also eased property purchases and lowered borrowing costs to shore up the economy. Over the past several months, China has been struggling with poor demand in its real-estate market. Also, extremely weak credit demand from businesses and consumers forced the PBoC to take immediate measures.

“This is the largest PBOC stimulus package since the onset of the pandemic,” said Julian Evans-Pritchard, an analyst at Capital Economics. “However, it may not be sufficient on its own,” he added, suggesting that additional fiscal stimulus might be required to steer growth back toward this year’s official target of around 5%.

Jamie Coutts, the chief crypto analyst at investment management firm Real Vision, believes that China’s recent stimulus package is positive for Bitcoin. Besides, he added that it would also encourage other central banks to cut rates. Coutts added:

“The bottom is in for global central bank liquidity for this cycle. Sit back and watch the other CBs fall into line. In a credit-based fiat fractional reserve system, debasement is a feature, not a bug.”

Following China’s ban on Bitcoin back in 2021, the correlation between Bitcoin and Chinese liquidity is less clear. However, Coutts stated that Bitcoin’s performance is still linked to global liquidity and China’s easing measures could lead to broader changes in risk appetite.

Following the Fed rate cut in September, the Bitcoin price made quick gains surging all the way to $64,000. On the technical chart, BTC is showing strength with the possibility of hitting a fresh all-time high very soon.

Bitcoin’s long-term chart is currently forming a bull-flag pattern. as per the below image, as of September 24, BTC was approaching the upper trendline of this flag, poised for a potential breakout above $78,000, a new all-time high.

China Stimulus Package Can Push Bitcoin Price to New All-Time High