Bitcoin (BTC) appears poised for a significant price breakout, with experts predicting a potential surge to $78,000 in the coming weeks. This forecast is driven by a combination of technical chart patterns and China’s latest economic stimulus measures, which are expected to have a positive impact on global liquidity.
China’s $140 Billion Stimulus: A Catalyst for Bitcoin
On September 24, the People’s Bank of China (PBOC) announced a $140 billion liquidity injection into its financial system by reducing the reserve requirement ratio (RRR) by 50 basis points. This move follows similar efforts by the PBOC to lower borrowing costs and ease restrictions on property purchases, aiming to revive China’s struggling real estate sector and broader economy.
Jamie Coutts, a lead crypto analyst at Real Vision, emphasized the bullish outlook for Bitcoin in light of this announcement. He noted that China’s aggressive liquidity injections could lead other central banks to implement similar measures, further boosting the cryptocurrency market.
“The bottom is in for global central bank liquidity for this cycle. Sit back and watch the other CBs fall into line,” Coutts remarked. He also pointed out that in a credit-based fiat system, monetary debasement is inherent, meaning that such liquidity injections could support assets like Bitcoin.
Previous Stimulus Announcements Sparked Major Bitcoin Rallies
Historical data suggests that Bitcoin has responded positively to Chinese stimulus measures. In October 2023, the PBOC injected $367.7 billion through reverse repos, followed by an additional $140 billion liquidity boost in January 2024. After these announcements, Bitcoin’s price more than doubled, highlighting the strong correlation between Chinese liquidity policies and the performance of risk assets like cryptocurrencies.
Although China banned crypto mining in 2021, the connection between global liquidity trends and Bitcoin remains strong. According to Coutts, the easing measures in China are expected to ripple across global markets, potentially triggering a broader appetite for risk assets.
Technical Analysis: Bitcoin Eyes $78K Breakout
From a technical perspective, Bitcoin’s chart is showing a “bull flag” pattern, further supporting the bullish sentiment. This pattern forms when the price consolidates within a descending channel following a strong upward move. Typically, a breakout above the flag’s upper trendline results in a price surge equal to the height of the previous uptrend.
As of September 24, Bitcoin was testing the upper trendline of this bull flag. If it breaks through, BTC could soar to $78,000, setting a new all-time high.
