Bitcoin’s momentum took a hit today following China’s decision to hold off on new stimulus measures aimed at boosting its economy. Investors had anticipated further economic support from China’s National Development and Reform Commission (NDRC) after the Golden Week holiday, especially given previous measures like rate cuts and liquidity support introduced in September.
However, the lack of urgency and absence of new stimulus plans from Beijing dampened market sentiment. According to a report by 10x Research, the expected stimulus was projected to “ignite a parabolic rally in cryptocurrency prices” due to increased global liquidity. The delay in such measures has dashed hopes for a substantial rally as Chinese markets reopened this week, spilling over into the crypto markets.
The Hang Seng index saw a massive 9.41% drop—the largest since 2008—while Bitcoin dropped by 2.86%, both in response to the lackluster announcement from China.
U.S. Economy and ‘Uptober’ Sentiment
Despite the setback, October—or “Uptober”—still holds potential, with market analysts pointing to the U.S. economy as a key driver for price action throughout the month. Strong jobs data has eased fears of a recession, suggesting that the U.S. might achieve a “soft landing.”
Upcoming data, such as the U.S. Consumer Price Index (CPI) report on October 10, is expected to be another significant factor. A forecasted drop in inflation to 2.3% (from 2.5%) supports the narrative of a slowdown in inflation, aligning with the previous decline in the Personal Consumption Expenditures (PCE) index, which fell to 2.2%.
Positive FTX Developments Signal a Bullish Q4
Adding to the positive outlook for the final quarter of the year, recent developments in the FTX estate creditor repayment process are bolstering optimism. A U.S. judge has approved FTX’s reorganization plan, which will see 98% of creditors receiving at least 118% of the value of their claims in cash.
Some experts speculate that these repayments, totaling around $2.4 billion, could flow back into the crypto markets, further fueling Bitcoin’s price. According to an October 8th K33 Research report, payouts are expected to begin by the end of this quarter and continue into early Q1 2025.
These FTX repayments, coupled with U.S. economic trends, are strengthening the case for a bullish Q4 for Bitcoin. Some even suggest that an altcoin season—potentially the largest since 2017—could be on the horizon.
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