Bitcoin nears new high as China joins Fed with pandemic-level stimulus

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Bitcoin looks poised for a potential rally following China’s recent announcement of a pandemic-level stimulus package. This development, along with recent interest rate cuts by the US Federal Reserve, has contributed to a macro environment that could push Bitcoin to new all-time highs.

The latest injection of liquidity from China

This week, the People’s Bank of China (PBOC) unveiled plans to inject about $140 billion into the economy by cutting the reserve requirement ratio by 50 basis points.

Following previous stimulus efforts, the price of Bitcoin has risen by more than 100%, and some analysts suggest that the latest injection of liquidity could have a similar effect.

The increase in M2 money supply and the global liquidity index further support the possibility of upward movements in the price of Bitcoin, as these factors have historically driven the asset price higher.

Technical indicators show earning potential

From a technical perspective, Bitcoin has broken out of a bearish wedge pattern, which is often seen as a bullish reversal signal. This breakout created momentum, pushing the price towards a key resistance level at $64,500. Analysts suggest that if Bitcoin breaks this level and establishes support, it could pave the way for a move to new highs.

If we overturn the red line, again #Bitcoin ATHs are imminent! pic.twitter.com/kHRdBSrgWz

— Crypto Rover (@rovercrc) September 26, 2024

Additionally, the Relative Strength Index (RSI) showed an upward move after a period of decline, indicating renewed strength in the price of Bitcoin. Some forecasts suggest this could see the price rise to around $85,000 by the end of the year, subject to continued favorable market conditions.

#Bitcoin $85,000: Intermediate Target 🎯

The weekly RSI breakout signals an explosive move to the end of the year for #BTC. 🚀 pic.twitter.com/M7slgFSCop

– Titan of Crypto (@Washigorira) September 21, 2024

Global Stimulus and Bitcoin Market Performance

Historically, increased liquidity has supported Bitcoin’s performance, particularly during periods of low interest rates and inflationary pressures. However, concerns remain.

While China’s measures aim to shore up its struggling economy, which is facing high unemployment and deflationary pressures, some analysts warn that the actions could lead to further inflation. In addition, China’s real estate sector remains under pressure, exemplified by Evergrande’s recent bankruptcy filing.

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