Bitcoin Holds Above $65,000 After China's 'Policy Bazooka' Stimulus

Bitcoin (BTC) surged past $65,000, holding steady at $65,580 amid a 3% rally, as experts point to easing monetary policy, China’s stimulus, and increasing on-chain activity as key drivers for the current momentum.

Analysts now suggest a fourth quarter rally is likely, with targets set for $70,000 in the near term.

Ethereum (ETH) also followed suit, gaining 1.5% to trade at $2,665, data from CoinGecko shows.

According to data from CoinGlass, about positions worth $154 million have been liquidated in the past 24 hours, with short positions bearing the brunt of the loss at $104.2 million compared to $49.8 million in long positions.

This liquidation trend indicates the market’s bullish sentiment, especially as Bitcoin continues to hold comfortably above the $65,000 mark.

Speaking with Decrypt, Ian Lee, Head of Operations at derivatives exchange Flipster, identifies the recent rate cuts in the U.S. and China as primary drivers behind Bitcoin’s current rally. "One of the main reasons for the current rally is the 50 bps rate cut in the U.S., as well as the PBOC’s rate cut," he states, adding that the ongoing news surrounding the U.S. presidential election on November 5 could further impact market movements.

Lee also points out that the Federal Reserve's monetary policy will be crucial in the coming months, noting, "The market is currently pricing in a roughly 50:50 chance of either a 50 bps or 25 bps rate cut at the November FOMC meeting."

He highlighted an uptick in on-chain activity on the Ethereum network following the Fed's recent rate cut, suggesting that early movers are positioning for a potential Total Value Locked (TVL) rebound in decentralized finance (DeFi) due to more attractive yields.

In a note sent to Decrypt, Markus Thielen of 10x Research emphasized the potential impact of China's recent $278 billion stimulus plan on the cryptocurrency market. He noted that historically, Chinese capital inflows into Bitcoin have triggered significant rallies, particularly in 2013 when exporters used over-invoicing to channel billions into Bitcoin.

"The recently announced stimulus measures, timed just as the Fed begins cutting rates, could trigger significant capital outflows from China into the cryptocurrency market," Thielen said, setting an optimistic near-term target of $70,000 for Bitcoin within the next two weeks.

Interestingly, this surge in liquidity coincides with Bitcoin's 30-day realized volatility dropping to 41%.

This reduced volatility makes Bitcoin more appealing to institutional traders who can now take larger positions while adhering to risk management protocols. "The likelihood of a Q4 rally is exceptionally high, with gains likely front-loaded," Thielen said, emphasizing that the breakout above $65,000 could spark further FOMO (fear of missing out) across the crypto market.

Meanwhile, speaking to Decrypt, Illia Otychenko, Lead Analyst at CEX.IO, pointed out that Bitcoin’s surge past $65,000 came on the back of multiple factors, including China's liquidity injection, ETF inflows, andpositive U.S. GDP data and identified a crucial price zone to watch.

"A solid break above $65,000 could propel Bitcoin toward the $66,600–$67,300 supply zone, as no significant volume clusters exist along the path." Should Bitcoin breach this resistance, it could pave the way for a move to $70,000, potentially the last hurdle before challenging its all-time high.

Vijay Pravin Maharajan, CEO and Founder of blockchain data network bitsCrunch, highlighted the favorable market conditions driven by surging global liquidity.

"The recent 50 bps interest rate cut by the Federal Reserve further supports this trend by making borrowing cheaper," he told Decrypt, adding that thestablecoin market cap approaching an all-time high signals strong demand for digital assets.

Maharajan also noted that following a protracted period of consolidation, Bitcoin has broken the $65k resistance level, which could trigger a re-testing of the $70,000 range and significant upward price movements.

Edited by Stacy Elliott.