Bitcoin Takes Another Shot at $63.5K as China’s Vague Fiscal Stimulus Deters Capital Shift

China’s recent fiscal stimulus announcement did not meet expectations, dampening hopes for a significant influx of capital into Chinese equities. As a result, analysts are predicting a negative reaction in the Chinese stock market in the coming week, which could further discourage macro investors from shifting capital from cryptocurrencies to China-linked assets.

In contrast, Bitcoin (BTC) is maintaining positive momentum, pushing back toward the $63,000 mark. After reaching highs of nearly $63,500 during the North American trading session, BTC is attempting to establish a foothold above this level. Although it topped $63,400 late Friday, it briefly dipped to $62,400 early Saturday before bouncing back.

China’s Finance Minister, Lan Fo’an, announced plans for additional support for the struggling property sector and local governments but provided limited details on measures to boost domestic consumption—an essential component to avoid deflation in the world’s second-largest economy. The lack of concrete stimulus details, alongside an increase in debt issuance, has left markets feeling let down, according to ForexLive analysts.

The previous pattern seen in late September and early October, where stimulus announcements from the People’s Bank of China led to a rally in oversold Chinese equities and resulted in capital outflows from both Asian equity markets and cryptocurrencies, could be echoed again. With the current environment, BTC seems poised to retain its strength, even as the outlook for Chinese equities appears uncertain.

A breakout above the current trendline for Bitcoin (BTC) would suggest the end of the recent pullback from the late September high, signaling a potential resumption of the rally that began from early September lows below $53,000. If BTC can maintain upward momentum, the next key resistance level to watch is around $69,000, marked by a trendline connecting lower highs from March and June.

On the downside, a critical support level is the October 10 low of $58,890. If BTC falls below this level, it could signal further bearish pressure, while a successful break above the trendline could open the door for a renewed bullish phase. Traders will be closely monitoring these levels as they navigate the current market conditions.