- A popular analyst has observed a coinciding trend between Chinese liquidity and Bitcoin.
- The analyst projects that the trend could continue into the latter days of the year.
- The developing pattern has generated curiosity among crypto users.
A popular crypto analyst identified on Twitter as tedtalksmacro has observed a coincidence between the increasing Chinese liquidity and a surge in the price of Bitcoin. He projects that the trend will continue into the latter days of the year, considering the stalling post-pandemic recovery.
The analyst noted an all-year coincidence between the Chinese liquidity and Bitcoin’s price. On April 30, 2023, he observed an unexpected contraction in China’s manufacturing. In a tweet, he indicated the contraction happened after a hot start to the year and projected more liquidity injection from the People’s Bank of China (PBoC) if the trend continued.
His observation in April matched Bitcoin’s behavior at the beginning of the year. Bitcoin rose from below $17,000 in January to over $31,000, gaining more than 87% in the process. That rally stalled in April, exhibiting a similar pattern with the Chinese manufacturing data, as observed by the analyst.
The coinciding pattern between Bitcoin’s price and the Chinese macroeconomic data generates curiosity among crypto users. Most of them wonder how much influence China could still have on the crypto market after its well-recognized clampdown on the industry.
In 2021, the Chinese government banned all cryptocurrency-related activities within the country’s borders. It followed up with a fierce implementation that led to the exit of most crypto companies and installations from the far-east country.
Since the Chinese clampdown, there have been positive developments relating to the cryptocurrency industry in Hong Kong. As a special administrative region, Hong Kong recently released encouraging reports that promote its efforts to become Asia’s cryptocurrency hub. The region plans to legalize buying, selling, and trading of cryptocurrencies.
Considering that Hong Kong falls under the People’s Republic of China, it aims to serve as a gateway for mainland Chinese institutions to enter the cryptocurrency space. That would inadvertently imply that economic factors in China could impact the cryptocurrency market and vice versa.
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