Chinese Market Correction Pushes Bitcoin to a 7-Day Low Amid Global Selloff
Tuesday saw the end of a September surge in Chinese equities as traders returned to the market after a week-long vacation. Early Asian hours saw a decline in Bitcoin as investors in the wider market responded. Bitcoin nearly lost all of its gains over seven days, plunging as low as $62,000 in late U.S. hours on Monday before rebounding to $62,700 in early Asian hours. Losses were 2.18% for the broad-based CoinDesk 20 (CD20), a liquid fund that tracks the biggest tokens by market value.
Lack of New Chinese Stimulus Measures Weakens Market Confidence Amid Global Uncertainty
In addition to the government’s September plans of rate cuts and market liquidity support to agitate a slowing economy, investors widely anticipated that the National Development and Reform Commission (NDRC) will announce more stimulus measures in a Tuesday briefing following the Chinese Golden Week holiday. When Chinese markets reopened on Tuesday, there were high hopes for a significant gain that would also affect cryptocurrency prices.
Though investors were unimpressed by the briefing’s overall lack of urgency and detail, as well as its lack of plans for additional stimulus, market confidence was damaged as worries about the ongoing conflicts in the Middle East persisted. Many others had the temptation to profit from the rally at the same time. Shanghai Composite, the country’s top index, opened 4% higher but lost ground over the day as traders took in fresh commentary. After rising on Monday and Friday, Hong Kong’s tech-heavy Hang Seng plummeted about 7%.
Prior to the recent stimulus, some experts had cautioned that a late-September rise might not last long enough to maintain momentum, since the 2015 cycle supported asset prices over a longer time frame. On the other hand, crypto traders are still waiting for hints about future positioning from the Federal Reserve meetings later this week. The agency is anticipated to issue the August crucial economic data that tracks growth as well as the minutes from the FOMC.
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