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bitcoin (btc) may see increased volatility in the coming days, driven by speculation surrounding another Chinese fiscal stimulus announcement and the expiry of $1.1 billion worth of btc options.
Chinese stimulus measures to help bitcoin?
According to the State Council Information Office, Chinese Finance Minister Lan Fo'an is expected to provide details on upcoming fiscal stimulus measures during a press conference on Saturday. These measures aim to stimulate economic activity in the country.
On September 24, the People's Bank of China (PBoC) cut interest rates on existing mortgages by 0.5% and reduced reserve requirement ratios for banks to boost market liquidity.
The global crypto market is paying increasing attention to China's stimulus plans as increased liquidity could positively impact the prices of digital assets like btc.
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While the announcement is anticipated, confirmation of another round of fiscal measures, especially if they exceed market expectations, could significantly increase the risk of assets like bitcoin.
Furthermore, if the United States Federal Reserve (Fed) decides Cutting key interest rates further could increase investor appetite for riskier assets, including digital currencies known for their volatility.
Prediction markets are currently speculating at least another 50 basis point (bp) cut in interest rates by the end of the year. Such a move would increase global liquidity and help btc avoid a capitulation that could cause its price to fall to the high range of $40 thousand.
btc Options Expiration Could Trigger Price Volatility
Another factor that could affect bitcoin price volatility is the 18,000 btc options worth $1.1 billion. x.com/GreeksLive/status/1844552660940358082″ target=”_blank” rel=”nofollow”>place will expire on October 11. At the time of writing, the put-call ratio is 0.91, indicating a slight tilt towards puts.
With bitcoin hovering around $60,000, the chances of reaching the “peak pain” price of $62,000 are increasing. For those uninitiated, “peak pain” refers to the price level at which most options traders are likely to incur losses.
While bitcoin has recently benefited from global interest rate cuts, geopolitical tensions in the Middle East and uncertainty surrounding the US presidential election in November have made it difficult to predict bitcoin's future price movement. btc.
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Despite the above challenges, some trading firms and crypto analysts are confident in the resilience of digital assets and the potential for a crypto rally in the fourth quarter of 2024.
For example, cryptocurrency trading company QCP Capital noted that bitcoin's rapid recovery following the Iranian offensive against Israel indicated its strong demand among investors.
Likewise, Bitwise CIO Matt Hougan outlined three major factors that could help btc price “melt” to a new all-time high (ATH) near $80,000 in Q4 2024. btc is trading at $62,086 at the time of this publication, a 2.7% increase in the last 24 hours.
Featured image from Unsplash, chart from Tradingview.com
