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Bitcoin: China's brake undermines bullish trend
By Davide Grammatica
China's stock market is affecting the performance of global markets and indirectly also Bitcoin, still struggling for $63k
Bitcoin's trend and China's role
Just last weeks we had talked about a new move by the People’s Bank of China to support the economy at a time of crisis. In general, new liquidity to encourage investment, which right from the start pushed up stock markets.
This has also presented an opportunity for Bitcoin, as a “risky” asset that is more attractive to investors, but risks are always around the corner. Economic instability and fears of recession, in fact, are always harbingers of increased volatility.
The proof is being offered to us in these hours, with the Chinese stock market suddenly in trouble and BTC cashing in on the blow by slipping just below $63 thousand.
By the way, the reasons are simple: in a recent government briefing, Zheng Shanjie, chairman of China’s National Development Commission (NDRC), would not outline new stimulus measures for the economy. And having lost hope of seeing a long-lasting support plan, the upward movement of the stock markets (and BTC) came to a sudden halt.
Is the US responding to China?
Traders seem to have taken advantage of this to take profits and protect themselves at a time when, in general, the variables determining market movement are many and unpredictable. Concerns regarding the conflict in the Middle East still weigh heavily , and there is always an eye on “macro” appointments facing the U.S.
It is precisely from the U.S. that the response of the main financial indexes is expected , with respect to which a significant increase in volatility is expected.
However, they seem to be reacting with some resilience in cryptocurrencies, which in the midst of this turbulence registers less “implied” volatility than last week.
