Bitcoin Takes Another Shot at $63.5K as China’s Vague Fiscal Stimulus Deters Capital Shift
BTC revisit Friday’s highs above $63,000, maintaining the positive momentum.
China’s highly-anticipated stimulus announcement fell short of expectations, suggesting low probability of continued outflows into China-linked assets.
Bitcoin made another push toward establishing a foothold above $63,000 Saturday as China’s highly-anticipated fiscal stimulus announcement fell short of expectations, reducing the likelihood of capital rotation into Chinese equities.
In a highly anticipated briefing on Saturday, China’s Finance Minister Lan Fo’an promised additional support for the slumping property sector and indebted local governments but provided little information on how they plan to boost domestic consumption, which economists believe is necessary to avoid a deflationary spiral in the world’s largest economy.
The finance ministry announced a higher debt issuance but didn’t disclose details of the fiscal stimulus, which could let the market down, according to analysts at ForexLive.
In other words, Chinese equities will likely react negatively in the coming week, discouraging macro investors from moving capital out of cryptocurrencies and into China-linked equities. Per some analysts, that’s precisely what happened in late September and early this month as a slew of stimulus by the People’s Bank of China torched a rally in the oversold Chinese equities, sucking out capital from Asian equity markets and cryptocurrencies.
Bitcoin, the leading cryptocurrency by market value, rose to nearly $63,500 during North American hours, probing a downtrend line characterizing the pullback from late September highs above $66,000, according to data source CoinDesk and TradingView. Prices topped $63,400 late Friday but failed to sustain the move and dipped to $62,400 early today.
A breakout above the trendline would imply an end of the pullback from the late September high and a resumption of the rally from early September lows under $53,000.
The next resistance is at around $69,000, characterized by a trendline connecting lower highs registered in March and June. On the downside, key support is the Oct 10 low of $58,890.
