James Richardson
Bitcoin has surged past the $65,000 mark in the last 24 hours, driven by a broader stock market rally following positive U.S. employment data and China’s new economic stimulus measures.
The stock market saw gains after Chinese officials committed to boosting their economy through additional stimulus, combined with favorable labor market data from the U.S. Last week, U.S. jobless claims dropped by 4,000 to reach a four-month low of 218,000, as reported by the Labor Department. On the same day, China’s Politburo emphasized the need to enhance the “focus and effectiveness” of policies aimed at revitalizing their economy.
Jake Ostrovskis, an OTC trader at Wintermute, highlighted the significance of these events, saying, “China introduced a major stimulus initiative as the Politburo committed to increased fiscal spending, including $284 billion in special sovereign bond issuance, and ‘forceful’ interest rate cuts. This improving liquidity environment is fueling structural bullish sentiment, and U.S. spot exchange-traded funds (ETFs) have seen five consecutive days of inflows.” He added that these factors have helped push bitcoin prices higher, as the market is once again testing the $65,000 level.
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However, Ostrovskis cautioned that maintaining this price point is critical. A failure to hold above $65,000 could lead to significant downside pressure, particularly as the current rise in open interest leaves the market vulnerable to sharp corrections.
Chinese stocks rally after stimulus announcement
China’s stimulus measures are designed to lower borrowing costs and boost economic activity. These include a 0.5% reduction in existing mortgage interest rates and a lowering of reserve requirements for banks, which will enhance their lending capacity. Additionally, restrictions on stock investment borrowing have been eased. Peopleโs Bank of China (PBoC) Governor Pan Gongsheng emphasized that these measures aim to stimulate domestic demand and restore investor confidence.
Aurelie Barthere, an analyst at Nansen, noted that bitcoin has lagged behind U.S. equities and Chinese stocks since Beijing’s stimulus announcement. “Chinese equities, particularly the Hang Seng, have outperformed bitcoin since the stimulus was introduced. This may be because the measures are focused more on Chinaโs domestic economy rather than having a broader global or U.S. impact,” Barthere explained.
Analysts at Bitfinex echoed concerns about market uncertainty. They noted that tail-risk assets like bitcoin are not yet benefiting from passive inflows. “Uncertainty needs to decrease before we see asymmetric passive demand returning to bitcoin,” the analysts told PRIME X.
