On Monday (October 14), Bitcoin plummeted to $62,500 in the short term. Whales hoarded 1.5 million bitcoins amid market turmoil, but the $283 billion debt stimulus plan reported in the Chinese market did not take place. The weekend press conference of the Chinese Ministry of Finance disappointed traders, slowing down the sentiment of funds pouring into cryptocurrencies and risky assets.
The Bit Journal reported that China's recent economic stimulus measures triggered a strong rebound in the cryptocurrency market, with China's debt ceiling increase and the injection of more liquidity into the market being key factors in this recovery. Earlier last week, as the US Consumer Price Index (CPI) rose, Bitcoin fell below $60,000, but quickly rebounded to around $63,000.
Despite recent volatility, Bitcoin whales have been steadily accumulating coins. Since March, they have collected 1.5 million Bitcoins, accounting for 7% of the circulating supply.
The success of Bitcoin ETFs is another sign of recovery, with these funds now holding more than 5% of the total Bitcoin supply. Institutional investors, including major players such as BlackRock and Metaplanet, have been increasing their holdings of Bitcoin, indicating a strong interest in Bitcoin among institutional investors.
But in the short term, negative news from China over the weekend hit risk sentiment.
Bloomberg reported that although China's finance minister promised to launch the most powerful support measures for debt reduction in recent years, the Ministry of Finance's highly anticipated press conference on Saturday lacked the strength that stock market investors hoped for, indicating that the volatile market of A-shares may continue after a strong global rally.
The article said that Chinese Finance Minister Lan Fuan promised to provide more support for the troubled real estate industry and hinted that the government would increase borrowing to support the economy, but the press conference did not disclose the overall amount of new fiscal stimulus measures that the market expected. The lack of new stimulus measures to stimulate consumption (a weak link in the Chinese economy) is another reason for traders to be disappointed.
Earlier reports said China was planning an additional $283 billion stimulus package, which gained widespread attention after the country's economic challenges were discussed at a Politburo meeting in September. Chinese stocks surged 25% to their highest level in two years after the stimulus package was announced. However, uncertainty remains as investors await further details of the government's spending plans.
China's stimulus measures are having a positive impact on global financial markets, while also providing strong support for the cryptocurrency market. The influx of liquidity and economic boost has driven the rise of Bitcoin and altcoins, while large investors continue to accumulate crypto assets. Analysts remain optimistic that Bitcoin may hit new highs before the end of the year.
Experts believe that the increase in the global M2 money supply could further fuel interest in Bitcoin and other cryptocurrencies. Some analysts predict that the price of Bitcoin could reach at least $90,000 by the end of the year. So far, October has been relatively quiet for Bitcoin investors, but many are still looking forward to the potential for an "Uptober" rally.
Bitcoin Technical Analysis
CoinTelegraph noted that Bitcoin prices have rebounded sharply from a drop below $60,000, but buyers are struggling to hold highs. Buying on dips and selling on rallies suggests a narrow range will form in the near term. A small positive is that lower levels show strong demand. After three consecutive days of outflows, the U.S. Bitcoin spot ETF received an inflow of $253.6 million on October 11.
Bitcoin is still in a sideways trend, but some analysts seem optimistic about altcoins. Based on specific indicators, analysts believe that the altcoin market may enter a "season of only rising and not falling." If Bitcoin remains above $60,000, traders may gradually turn their attention to select altcoins.
Since Bitcoin broke through the 20-day exponential moving average of $62,119 before the weekend, bulls have failed to push the price above the overhead resistance of $65,000.
The sellers are trying to pull the price back below the 20-day EMA. If they succeed in doing that, Bitcoin could drop to the 50-day simple moving average at $60,727. The support zone between the 50-day SMA and $60,000 is crucial for the bulls as a break below it could open the doors for a drop to $57,500.
Contrary to this assumption, if the price rebounds strongly from the 20-day EMA, it will suggest that the bulls are buying on minor dips. Bitcoin could then rally to $66,500. This level might again pose a solid challenge, but if the bulls gain the upper hand, the upside could reach $70,000.
