Bitcoin & Markets: China’s Economic Stimulus, Rally Signals, and Trade Risks

China Launches Economic Stimulus

– Rate Cuts & Reserve Requirement Reduction: The People’s Bank of China cut its seven-day repo rate by 10 basis points to 1.4% and lowered the bank reserve requirement ratio by 50 basis points.
– Liquidity Injection: These measures will release roughly ¥1,000 billion (~$139 billion) into the financial system.
– Timing: The new rates take effect Thursday, just ahead of the May 9–12 U.S.–China finance talks in Switzerland; the reserve requirement cut follows on May 15.
– Additional Support: Mortgage rates for first-time buyers were cut to 2.6%, and targeted programs are planned to aid small businesses.

Countdown to a New All-Time High

– 141 Days Since ATH: It has been 141 days since Bitcoin’s last record high.
– Average Timeframe: Historically, a new ATH arrives after an average of 211 days—leaving roughly 70 days on the clock, though some analysts foresee an earlier breakthrough.

On-Chain Metrics Point to a Rally

– Delta Indicator: The gap between market capitalization and the average transaction price (“delta”) historically triggers profit-taking around 170%. Bitcoin needs another ~58% to reach that threshold, signaling a heat-up ahead of the next leg up.
– Weekly MACD: The weekly moving averages are nearing a bullish crossover—an event that preceded major upswings in both 2023 and 2024.

Current Price Action & Key Levels

– $97,000 as Resistance: Bitcoin rallied to $97,000 ahead of the Fed meeting but met resistance in the $97–98.5K zone and retraced lower.
– Fed-Driven Volatility: Anticipation around the Fed’s decision is creating short-term whipsaw risk. Traders should wait for clarity before chasing momentum.
– Support Turned Resistance: If Bitcoin can hold above $97,000, the path toward a new ATH will be clear.

Geopolitical & Macro Insights

– U.S.–China Trade Talks: Citi analysts expect gradual easing of tariffs over the next six months:

1. Fentanyl-related tariffs (20%) may be removed first.

2. Escalation-related tariffs (91%) could follow.

3. Complex reciprocal tariffs (34%) tied to industrial policy will be hardest to lift.
   – Citi’s Take: A comprehensive deal is unlikely before the U.S. midterms; investors should accept a slow, partial path to trade de-escalation.

China’s stimulus and looming U.S.–China negotiations, combined with positive on-chain and technical indicators, set the stage for Bitcoin’s next rally. Yet, legislative uncertainty and Fed-induced volatility demand a balanced approach: maintain strategic core positions while employing tactical hedges, and watch $97,000 as the pivotal level for the next major move.