BTC revisited Friday’s high above $63,000, maintaining the positive momentum.
China’s highly-anticipated stimulus announcement fell short of expectations, suggesting a low probability of continued outflows into China-linked assets.
Bitcoin (BTC) made another push toward establishing a foothold above $63,000 on Saturday as China’s highly-anticipated fiscal stimulus announcement fell short of expectations, reducing the likelihood of a capital rotation into Chinese equities.
In a 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 the government plans to boost domestic consumption, which economists believe is necessary to avoid a deflationary spiral in the giant Chinese 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 announcements 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 the North American daytime, 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.