Bitcoin Takes Another Shot at $63.5K as China’s Vague Fiscal Stimulus Deters Capital Shift

During a much-awaited press conference on Saturday, China’s Finance Minister, Lan Fo’an, announced extra aid for the struggling real estate market and cash-strapped local administrations. However, he was vague about their strategies to enhance domestic spending, an area economists emphasize is crucial to prevent a downward spiral of deflation in China’s massive economy.

The Finance Ministry revealed plans for increased borrowing, yet declined to share specifics about the proposed fiscal stimulus package. This lack of clarity might cause unease among financial markets, as suggested by analysts at ForexLive.

To put it simply, if analyst predictions hold true, Chinese stocks could experience a downturn in the upcoming week. This potential drop might make it less appealing for large-scale investors to shift their funds away from cryptocurrencies and towards Chinese equities instead. It’s suggested that this is what occurred in late September and early October when a series of stimulus announcements by the People’s Bank of China fueled a rally in oversold Chinese stocks, causing capital to flow out of Asian stock markets and cryptocurrencies as a result.

Bitcoin, the most valuable cryptocurrency, almost reached $63,500 during North American trading hours, testing a decline trend line that follows the pullback from Bitcoin’s highs in late September above $66,000, as per CoinDesk and TradingView data. The price peaked at $63,400 towards the end of Friday but couldn’t maintain the rise and dropped to $62,400 this morning.

If the price surpasses the current trendline, it suggests that the recent decline from the peak in late September has ended and the upward momentum from the start of September below $53,000 will resume.

As a crypto investor, I’ve got my eyes on the next potential resistance point, roughly around $69,000. This level is significant because it’s where a trendline connecting the lower highs from March and June intersects. On the flip side, if the market takes a downturn, I’m looking for key support at the low recorded on Oct 10, which was $58,890.