As a seasoned researcher with over two decades of experience in financial markets, I have seen my fair share of market fluctuations and economic downturns. The current bullish trajectory of Bitcoin is indeed intriguing, especially considering the recent inflow into Bitcoin ETF and the stimulus measures announced by China to revive its economy.
On a Friday, the price of Bitcoin surpassed $65,000 for the first time since August, marking a 25% increase over the past three weeks. This positive trend can be attributed to an increase in Bitcoin ETF investments and shifts in the global market’s macroeconomic landscape. Yet, this upward momentum could face challenges due to the potential influence of China’s worsening housing crisis on the crypto market.
Bitcoin ETF Gets $365M Inflows, but Will China’s Housing Woes Impact BTC?
Over the past 24 hours, the price of Bitcoin has been showing a fresh bullish trend, climbing from $63,121 to $66,280 – that’s a 5% rise. This surge comes after approximately $365.57 million was invested in a U.S. Bitcoin ETF on Thursday, marking the highest single-day investment in over two months.
Some experts believe that the recent surge in the cryptocurrency market may be linked to China’s announcement of substantial economic stimulus plans aimed at revitalizing their slowing economy. As part of these efforts, China intends to readjust existing mortgage rates to match current market levels, which could result in a decrease of about 0.5 percentage points. Furthermore, the government is planning to lower the minimum down payment required for second homes from 25% to 15%.
This move aims to stimulate the housing sector, a major contributor to China’s economy.
As an analyst, I’d rephrase Peter Berezin’s statement as follows: This week’s stimulus isn’t primarily designed for rapid economic expansion. Instead, it serves a defensive role, aimed at warding off an impending economic downturn or collapse.
Berezin highlights that China’s housing starts are down 70% from their peak, indicating the construction sector’s distress. The completion of the housing project is down only 11% because the government is stepping in to finance developers to complete already stalled projects.
Completions have decreased by just 11% due to the government facilitating funding for real estate developers, thereby allowing them to resume work on projects that were earlier halted. In his tweet, he mentioned…
Once that pipeline of old projects is cleared out, housing construction will plunge.
Even with an increase in Bitcoin ETF investments, the ongoing China housing crisis might cause an initial fluctuation and potential drop in Bitcoin prices due to cautious investors selling off riskier assets such as cryptocurrencies.
This week, the Chinese government found itself compelled to take action due to a significant drop – approximately 70% – in new housing construction projects compared to their highest point.
Project completions have decreased by just 11% due to the government facilitating funding for property developers, allowing them to resume work on previously halted constructions.
Once that…
— Peter Berezin (@PeterBerezinBCA) September 27, 2024
On the other hand, the unique characteristics of Bitcoin and Decentraland might gradually draw investor attention away from conventional investments, particularly during an unstable economy. Additionally, China’s efforts to loosen its monetary policy (such as interest rate reductions) could potentially make these higher-risk assets more alluring.
BTC Price Hints Major Breakout
As the deadline approached, Bitcoin’s price stood at approximately $66,272, contributing to a market capitalization of about $1.3 trillion. If the buying pressure continues, the value might increase by around 3%, potentially testing the multi-month resistance trendline at roughly $68,350.
A potential breakout could drive the Bitcoin price prediction above the $80,000 mark.
Instead, if there’s a shift from the downward trendline, it will strengthen the negative momentum and prolong the ongoing period of sideways movement.
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2024-09-27 19:44