Bitcoin Eyes $63.5K as China’s Fiscal Stimulus Fails to Impress, Reducing Capital Shift

Bitcoin (BTC) has once again attempted to secure a position above $63,000 this Saturday, after China's much-anticipated fiscal stimulus announcement underwhelmed market expectations, reducing the chances of a capital flow shift into Chinese equities.

The leading cryptocurrency, by market value, is maintaining positive momentum and revisited Friday’s high of $63,000.

In a briefing held on Saturday, China’s Finance Minister Lan Fo’an announced further support for the struggling property sector and local governments grappling with debt but failed to offer specifics on how the government plans to stimulate domestic consumption.

Many economists believe such measures are crucial to prevent a deflationary spiral in the world’s second-largest economy.

Though the finance ministry revealed plans for increased debt issuance, it provided scant details on the fiscal stimulus itself. Analysts at ForexLive suggested that the market may interpret this lack of information as a disappointment. “The market could feel let down,” they said. Without clear plans, Chinese equities are expected to face a negative reaction in the upcoming week, dissuading macro investors from moving capital out of cryptocurrencies and into China-related assets.

Some analysts argue that a similar pattern occurred in late September and early October, when a series of stimulus measures from the People's Bank of China led to a rally in Chinese equities, pulling capital away from both Asian stock markets and cryptocurrencies.

Bitcoin, however, continues to strengthen. According to data from CoinDesk and TradingView, BTC reached close to $63,500 during North American trading hours, testing a downtrend line that had defined its retreat from late September highs of over $66,000.

Although prices hit $63,400 late on Friday, the move was not sustained, and BTC dropped to $62,400 earlier today.

A breakout above the trendline would indicate the end of Bitcoin’s pullback from its late September peak, marking a potential resumption of the rally that started from early September lows below $53,000. Should this happen, the next resistance point lies around $69,000, marked by a trendline that connects the lower highs seen in March and June. On the downside, key support remains at the October 10 low of $58,890.

By fLEXI tEAM