Bitcoin ($BTC ) is expected to experience heightened volatility in the coming days as speculation mounts regarding potential Chinese fiscal stimulus measures, alongside the expiration of BTC options valued at $1.1 billion.
### Chinese Stimulus Measures: A Potential Boost for Bitcoin?
Chinaâs Finance Minister, Lan Foâan, is anticipated to outline new fiscal stimulus measures during a press conference hosted by the State Council Information Office on Saturday. These measures aim to invigorate economic activity in China, following recent actions by the Peopleâs Bank of China (PBoC). On September 24, the PBoC reduced interest rates on existing mortgages by 0.5% and lowered the reserve requirement ratios for banks to increase market liquidity.
The global cryptocurrency market is keeping a close watch on Chinaâs forthcoming stimulus plans, as additional liquidity could positively impact digital assets such as Bitcoin. If the announced measures surpass market expectations, risk-on assets like BTC could see a significant boost. Furthermore, if the U.S. Federal Reserve (Fed) proceeds with additional interest rate cuts, it could drive investors toward riskier assets, including cryptocurrencies, which are known for their volatility.
Market predictions currently indicate that the Fed may implement a further 50 basis point (bps) cut in interest rates by the end of the year. Such a move would likely increase global liquidity and potentially prevent BTC from facing a substantial decline that could drop its price to the high $40,000 range
BTC Options Expiry and Implications for Price Movement
Another major factor that may influence Bitcoin's price volatility is the expiration of $1.1 billion worth of BTC options, equivalent to 18,000 BTC, set to occur on October 11. The current put-call ratio is 0.91, signaling a slight bias toward put options. With Bitcoin trading around $60,000, the probability of reaching the âmax painâ price of $62,000 is rising. The âmax painâ level is the point where the largest number of options traders are expected to incur losses.
Although Bitcoin has benefited recently from global interest rate reductions, geopolitical tensions in the Middle East and uncertainties surrounding the upcoming U.S. presidential election in November create a challenging environment for forecasting BTC's price movements.
### Market Sentiment and Prospects for a Q4 Rally
Despite these uncertainties, some trading firms and cryptocurrency analysts remain confident in the resilience of digital assets and foresee the possibility of a rally in the fourth quarter of 2024. QCP Capital, a crypto trading firm, pointed out Bitcoinâs rapid recovery following recent geopolitical events, such as the Iranian offensive against Israel, as evidence of strong investor demand.
Similarly, Matt Hougan, CIO of Bitwise, outlined three key factors that could propel Bitcoin's price to a new all-time high (ATH) of nearly $80,000 in Q4 2024. As of the latest data, Bitcoin is trading at $62,086, reflecting a 2.7% increase in the last 24 hours.
