Chinese Stocks Crack Following A Week of Rally, Will BTC and Altcoins Benefit?

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As a seasoned analyst with over two decades of experience under my belt, I must say that Tuesday’s Chinese stock market crash is a stark reminder of the volatile nature of global markets. The rapid rise and fall of Chinese stocks, fueled by the People’s Bank of China’s economic-boosting measures, is a classic case of the market’s insatiable hunger for growth.

Although Chinese stocks had a promising beginning on Tuesday, they plummeted later due to China’s top economic strategist postponing additional stimulus plans. At the moment of publication, the Hang Seng Index (HSI) is experiencing a 7% decline, which represents its largest one-day drop since the 2008 financial crisis. Cryptocurrency and altcoin investors are keeping a keen eye on these events, anticipating potential shifts in investment as markets may reallocate funds into digital currencies.

Chinese Stocks Crack After A Week of Rally

Over the past three weeks, the Chinese stock market has experienced significant growth after the People’s Bank of China (PBoC) announced a $140 billion economic stimulus package on September 15th. This urgent move by the central bank led to an impressive surge in Chinese stocks, with the entire market rising approximately 34% within this short period.

Meanwhile, during the same period, other Asian markets experienced significant foreign institutional investor (FII) withdrawals, while investment in the Chinese market surged rapidly. A similar trend was noticeable with Bitcoin and other cryptocurrencies at the beginning of October, dampening the highly anticipated ‘Uptober’ rally.

With Chinese stocks experiencing a slowdown, there’s growing interest among investors about the impending developments and if there will be a return of capital into Bitcoin and other cryptocurrencies, potentially leading to an uptrend. According to recent findings from CoinGape, Bitcoin is preparing for a fresh record high in October.

Momentum in the surge of Chinese stocks waned following the National Development and Reform Commission, China’s leading economic strategist, refraining from announcing additional significant stimulus measures during a news conference, as reported by David Ingles TV.

— Bloomberg TV (@BloombergTV) October 8, 2024

Contrarily, the World Bank predicts that China’s growth rate will slow down in 2025. According to its semi-annual report released on Tuesday, the global financial institution anticipates China’s economic growth to decrease to 4.3% next year, a drop from the previously estimated 4.8% for 2024.

Over the past 30 years, China’s economic expansion has positively impacted nearby countries. However, the magnitude of this influence is decreasing. Temporary financial aid might boost immediate growth, but sustained expansion in the future hinges on substantial structural changes.

According to the World Bank, several factors such as a deceleration in China’s growth, changing trade and investment trends, and heightened global policy unpredictability might have an effect on the East Asia and Pacific area.

BTC and Altcoin Trajectory Ahead

The cost of Bitcoin has been turned down at around $64,000 and now stands approximately 2% lower, dipping below $62,500. Yet, market experts observe that Bitcoin is maintaining its strength within the boundaries of the bull market’s support level, despite the ongoing market turbulence.

#Bitcoin Held on to the bull market support band for another week.

It didn’t manage 3 weekly closes above like this, since losing it back in May.

It’s up to the bulls to finally take it higher from here now after all this consolidation up here.

Since the start of this week,…

— Daan Crypto Trades (@DaanCrypto) October 8, 2024

Conversely, altcoins have been mirroring Bitcoin’s movements, with Ethereum and other cryptocurrencies holding firm at significant support points. Here’s a selection of promising altcoins to keep an eye on in October 2024.

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2024-10-08 10:32