China Awakens The Economic Dragon, Bitcoin Could Benefit From It!

The recent announcement of China’s massive economic stimulus plan could propel Bitcoin’s price to new all-time highs. As Beijing injects colossal liquidity into its economy, analysts predict a significant impact on the crypto market, with BTC at the forefront.

The Chinese stimulus plan, a springboard to new heights for Bitcoin?

The Middle Kingdom is deploying heavy artillery to restart its economic engine. The People’s Bank of China (PBoC) has just announced an unprecedented stimulus plan since the pandemic, injecting $140 billion of liquidity into the financial system.

This decision comes with a reduction in the reserve requirement ratio and an easing of mortgage lending conditions.

This ambitious plan aims to combat the headwinds slowing the world’s second-largest economy. The looming deflation and the persistent weakness of the real estate sector have prompted Beijing to act decisively. Authorities hope to revive domestic demand and stimulate investment, two essential pillars of Chinese growth.

Bitcoin, the unexpected big winner?

Paradoxically, Bitcoin, banned from China since 2021, could benefit from this massive stimulus. Jamie Coutts, chief cryptocurrency analyst at Real Vision, asserts that this liquidity injection will have a bullish effect on Bitcoin’s price.

According to him, Chinese monetary easing could trigger a domino effect, prompting other central banks to follow suit.

The main argument is based on the historical correlation between global liquidity and Bitcoin’s performance. Although the direct link with China has been less evident since the ban, the impact on global risk appetite remains significant. Investors, seeking safe havens against monetary depreciation, may increasingly turn to cryptos.

The timing of this Chinese stimulus seems ideal for Bitcoin. The leading crypto is already showing signs of technical strength, approaching the upper trendline of a bullish chart pattern. A breakout above this level could pave the way for a new all-time high, potentially beyond $78,000.

In short, the convergence of China’s expansionary policy and Bitcoin’s strong fundamentals creates fertile ground for a new growth phase. If this dynamic confirms, the crypto market could experience an explosive end to 2024, propelling Bitcoin to uncharted territories.