Bitcoin Surge Driven by Chinese Stimulus Measures

Bitcoin surge sees BTC prices hit a two-month high of $66,000, supported by China’s economic stimulus and the best stock performance in 16 years.

Bitcoin prices surged to a fresh two-month high on September 27, as economic stimulus in China fueled significant market optimism. The BTC/USD pair touched $66,194 on Bitstamp, reflecting a 3% gain week-to-date. Chinese stimulus measures provided a critical boost, allowing the Shanghai Composite Index to record its best week since 2008.

China's move to support its economy sparked significant market interest, with stocks responding positively, creating a domino effect that extended into global markets, including Bitcoin. The combination of local and international influences now has many market observers feeling a sense of déjà vu, reminiscent of previous bullish runs.

Bitcoin Surge Follows Stock Market Rally

Bitcoin's ascent to $66,000 was closely linked to the performance of Chinese stocks. The Shanghai Composite Index saw its strongest week in 16 years, benefiting from several key stimulus initiatives introduced by the Chinese government. This economic boost sent waves through global financial markets, further elevating Bitcoin's price as investors turned their focus to risk assets.

BTC/USD 1-hour chart. Source: TradingView

Data from Cointelegraph Markets Pro and TradingView confirmed the sharp rise in Bitcoin prices, with BTC/USD climbing steadily throughout the week. Market participants like trading resource The Kobeissi Letter noted that the situation feels "frighteningly familiar," comparing it to similar stock and Bitcoin movements during times of policy easing and stimulus.

The Federal Reserve's recent 50-basis-point interest rate cut on September 18 had already set the tone for more liquidity in global markets, prompting rallies in both the S&P 500 and Bitcoin. The rate cut, seen as a sign of easing policy, further fueled risk appetite across various financial assets.

PCE Data Keeps Markets Optimistic

The release of the U.S. Personal Consumption Expenditures (PCE) Index for August added to the overall market sentiment. The data, which came in largely as expected, helped to sustain optimism among traders and investors. Crypto trader Skew commented that the results were “pretty good” for market performance, highlighting that “yields and the dollar” would be key areas to watch as the week progressed.

The Federal Reserve’s next meeting in November will be a critical juncture for the markets. Although many are calling for another 50-basis-point rate cut, some market analysts, including The Kobeissi Letter, have argued that the current state of the economy doesn’t warrant further cuts. Nevertheless, the CME Group’s FedWatch Tool shows that market participants are anticipating additional easing measures.

Fed target rate probabilities. Source: CME Group

The BTC price surge is thus occurring in an environment where both macroeconomic policy and market expectations are aligning to create favorable conditions for Bitcoin. As noted by The Kobeissi Letter, the parallels to previous market cycles—where stimulus measures triggered massive price increases in both stocks and cryptocurrencies—are strikingly clear.

BTC Price Outlook: $65,000 Support Remains Strong

Despite some brief pullbacks from its new highs, Bitcoin continues to maintain strong support at around $65,000. Trading activity on major exchanges like Binance shows substantial bid liquidity, with support shifting toward the $63,000 range.

In addition, prominent market participants are noting a shift in the market depth, as explained by Skew in a recent post. Skew observed that there’s been a movement from ask to bid liquidity, suggesting that buyers are increasingly stepping in at higher price levels. This shift in trading behavior could indicate that the market is preparing for further bullish momentum in the days to come.

Moreover, Filbfilb, co-founder of trading platform DecenTrader, highlighted an important metric that could point to continued upward price action for Bitcoin. He revealed that the ratio of long to short positions is currently "very low," a condition that has historically preceded significant price increases. "I'm of the view that Bitcoin has a particularly familiar bullish smell," Filbfilb said, reinforcing the idea that the current market setup resembles previous periods of rapid price appreciation.

BTC long/short ratio. Source: Filbfilb/X

Bitcoin’s recent price activity, fueled by macroeconomic factors such as China's stimulus and favorable PCE data, is capturing the attention of investors worldwide. With strong support levels and a shift in market behavior indicating further gains, all eyes are on Bitcoin as it continues to push toward new highs. As it stands, the cryptocurrency is firmly positioned to benefit from both global economic trends and internal market dynamics.