China pushes up the price of Bitcoin (BTC)

Today, with the reopening of the Asian stock markets after the weekend, the good performance in China also allowed the price of Bitcoin to rise.

It should not be forgotten that in the Asian country, strong economic stimuli are on the way, and this inevitably ends up spreading optimism even in the financial markets. 

The rise of Bitcoin’s price thanks to China

Over the weekend, the price of Bitcoin had returned below $63,000, after the brief drop below $59,000 on Thursday the 10th.

On the other hand, volatility was expected by analysts between October 9 and 14, and so it was. 

These movements, however, are always part of the long lateralization trend that started even at the end of March, and for months has seen the price of Bitcoin oscillate between $57,000 and $72,000 with rare exceptions.

Lately, this range has become a bit more compressed, given that since September 13, the fluctuations have been between $57,000 and $66,000. 

In fact, at this moment the key point seems to be precisely the 66,000$, which have not been surpassed even today. 

At the reopening of the Asian markets, the price of Bitcoin was still below $63,000, but after a few hours, especially the Shanghai stock exchange started to rise, so much so that it is now at +1.6%, dragging BTC along with it. 

During the session, the price of BTC rose to almost $64,500, then repositioned around $64,000. 

The performance of China

Today, in reality, the Hong Kong stock exchange is slightly down, but it should not be forgotten that the stock exchange where the companies’ shares that primarily operate in their domestic market are listed is that of Shanghai. 

Starting from September 17, the Hong Kong stock exchange and the Shanghai stock exchange have strung together a truly epochal series of positive sessions, so much so that less than a month into this rally, probably still ongoing, the former is already overall at +22%, while the latter at +21%. 

Furthermore, Hong Kong had risen up to +33%, with a rally that seemed excessive from the start, and therefore it is just correcting to return to the levels of those in Shanghai. 

The situation in China has already seen a small expansion of monetary policy that has triggered the rise of its stock markets, and in the coming months, it will see the release of many economic stimuli. 

After the end of the pandemic, in fact, some weaknesses regarding the Chinese economy emerged, and the government initially decided not to intervene too forcefully. 

Such problems have not disappeared, and therefore the government was eventually forced to intervene with strength. 

It should not be forgotten that during the pandemic many central banks, including the Fed, created and issued enormous amounts of liquidity into the markets, while the Chinese bank did much less. So it is now doing, in part, what other central banks did 4 years ago. 

China and the impact on the price of Bitcoin

Bitcoin is actually not strictly connected to China or the Chinese markets, but it is closely connected to the amount of liquidity circulating in the financial markets. 

Therefore, anything that is capable of significantly changing, and in a short time, the liquidity in the financial markets ends up impacting the price of Bitcoin. 

In this case, the new economic and monetary policies of China, made up of stimuli to the economy and markets, inevitably end up having a positive effect on the price of BTC. 

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Moreover, for some time now there has also been talk of the possibility that the Asian country might finally remove the ban on Bitcoin, and this could attract many potential Chinese investors, or speculators. In reality, despite the ban, there are already many Chinese who operate on crypto markets, using foreign exchanges, but there could be many more. 

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The trend of Bitcoin

To all this must be added the general trend of the price of Bitcoin, linked to its four-year halving cycle. 

In the past, both times when the presidential elections were held in the USA a few months after the halving (2016 and 2020), in the second half of October a great bullrun of the crypto markets was triggered. 

The elections are held in early November, and the markets always try to anticipate events, even if with the minimum advance possible. 

The hypothesis circulating is that even this year before the US presidential elections on November 5, the markets might start to rise, also because the same trend in the price of Bitcoin is giving some bull signals. 

According to some analysts, the key threshold to surpass to trigger a possible bull phase is $65,000, but for others, it is $66,000. Since it already approached $66,000 a few days ago, it is prudent to keep an eye on this second threshold in particular. 

It is always important to emphasize that there is no certainty that all this may actually happen, but since the dollar is strengthening, and after the elections it might weaken, the probabilities at this moment seem to be favorable to BTC.