Key Points
- China’s potential liquidity injection could boost Bitcoin and other cryptocurrencies.
- Bitcoin’s current consolidation phase and strong market indicators hint at a potential price surge.
China’s Potential Liquidity Injection
China is reportedly preparing to infuse significant liquidity into its economy. This move could potentially elevate the value of Bitcoin and other cryptocurrencies. Historically, the People’s Bank of China has increased liquidity in August, with the last few injections taking place on specific dates in 2020, 2021, 2022, and 2023.
There was a brief boost in liquidity in June, but activity has been minimal since then. It is speculated that China might be waiting for the Federal Reserve to cut rates, possibly on September 18, before increasing its liquidity efforts.
Bitcoin’s Market Indicators
Despite recent dips, the cryptocurrency market remains bullish. Bitcoin is currently in its usual post-halving consolidation phase, which is often followed by a significant bull run. This phase, combined with China’s expected liquidity injection, could potentially trigger a market explosion.
An analysis of Bitcoin address holdings on IntoTheBlock shows little movement, suggesting accumulation. This phase typically precedes significant market surges as it indicates a period of order placement by traders and investors. This current accumulation phase hints at a potential rise in Bitcoin and other cryptocurrency prices, driven by an anticipated increase in liquidity.
The Bitcoin price chart shows a double bottom below the daily 200 EMA, a pattern often signaling a market rally. This is reinforced by a retest of the lower Gaussian channel band, coinciding with the daily 200 EMA. These strong indicators suggest that Bitcoin is poised to rise soon, especially with the added boost from China’s liquidity injections.
Furthermore, the anticipated liquidity boost has created a strong bullish signal with a large weekly candle and a significant rejection wick. This suggests a potential surge in Bitcoin, Ethereum and altcoins in the coming weeks. Support levels on higher time-frames are also showing strong buying interest, reinforcing the expectation of a market rise.
