Bitcoin Stumbles as China’s Economic Strategy Shift Rattles Crypto Markets
Bitcoin (BTC) price retreated from recent highs on Tuesday as hopes for aggressive economic stimulus measures from China were dashed, dampening sentiment across risk assets. The leading cryptocurrency dropped as low as $62,000 before recovering slightly to $62,700 in early Asian trading hours.
China Underwhelms Markets
At a briefing following China’s Golden Week holiday, the National Development and Reform Commission (NDRC) failed to announce any major new stimulus plans as many investors had anticipated. NDRC Chairman Zheng Shanjie described China’s economy as “stable” and showing “progress,” saying fundamentals are unchanged and there’s confidence in meeting the country’s economic growth target of around 5%.
The lack of fresh stimulus measures disappointed markets that had been expecting a continuation of September’s rate cuts and liquidity support. China’s Shanghai Composite index gave up early gains to close lower, while Hong Kong’s Hang Seng index plunged nearly 7%.
The muted response from Beijing spilled over into crypto markets, with Bitcoin paring most of its gains from the past week. Other major cryptocurrencies like Ethereum (ETH), Solana (SOL) and BNB also declined up to 4%.
BTC/USD Technical Analysis Points to Key Support Levels
From a technical perspective, Bitcoin is testing an important support zone between $62,000-$62,500. This area aligns with the 50% Fibonacci retracement level of the recent upward move from $61,723 to $64,419.
A break below could see BTC test the next major support around $61,750. On the upside, Bitcoin faces resistance near $63,200, with a move above potentially opening the door to retesting recent highs around $64,400.
The hourly Relative Strength Index (RSI) for BTC/USD has dipped below 50, indicating short-term bearish momentum. However, the price remains above the 100-hour Simple Moving Average, suggesting the overall uptrend may still be intact.
Bitcoin Traders Eye Fed Minutes for Further Clues
With the China stimulus narrative losing steam, crypto traders are now looking ahead to the release of Federal Reserve meeting minutes later this week for insights into the central bank’s policy outlook. Any hints of a less hawkish stance could provide a boost to risk assets like Bitcoin.
In the meantime, analysts will be watching to see if Bitcoin can hold above key support levels and regain upward momentum. The next few days could prove pivotal in determining whether BTC can mount another challenge of the $65,000-$70,000 range in the near term.
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