Intraday crypto trading, which is based on daily movements, does not require accurate predictions due to the constantly changing market. However, when it comes to medium-term trading, some predictions can be made. The crypto markets have been relatively stagnant for several months, with occasional significant moves in individual cryptocurrencies that quickly recede. The total market capitalization of the crypto markets is currently around $1 trillion, similar to levels seen in November 2022. Bitcoin’s dominance has increased from 40% to almost 50%, indicating that its price is driving the market capitalization while altcoins decline.
Looking ahead, the trend of minimal movement in the crypto market may change by the end of next year due to the April halving event. China’s economic crisis and risk of deflation could lead to a stimulus plan involving quantitative easing (QE), injecting liquidity into the markets and potentially boosting bitcoin’s price. Historically, bitcoin halvings have triggered speculative bubbles in the crypto markets, and the next halving is expected in April 2024. Speculation suggests that China could launch its QE campaign around this time, aligning with a potential bitcoin bull run.
Despite retail investors being theoretically banned from crypto trading in China, their absence may not hinder a bull run as large Chinese investors can operate abroad where trading is allowed. However, a full-scale QE by China could cause the value of the yuan to plummet further against the US dollar. As the yuan is already at its lowest level in sixteen years, it remains uncertain if China would allow further depreciation. While it cannot be predicted with certainty if there will be QE during bitcoin’s fourth halving year, it is a possibility that should not be disregarded.
Hot Take: The Future of Crypto Trading and China’s Influence
The future of crypto trading hinges on various factors, including China’s economic situation and potential quantitative easing measures. While intraday trading does not require precise forecasts, medium-term trading can benefit from understanding market trends. The crypto markets have experienced minimal movement recently, with bitcoin’s dominance playing a significant role in maintaining market capitalization. However, the upcoming April halving event and China’s potential QE plans could reshape the market.
China’s economic crisis and risk of deflation may prompt the Chinese government to introduce a stimulus plan involving quantitative easing. This move could inject liquidity into the markets and potentially trigger a new bull run in the crypto markets. Historically, bitcoin halvings have led to speculative bubbles, and the next halving is expected in April 2024. Speculation suggests that China might launch its QE campaign around this time, aligning with a potential bitcoin bull run.
Although retail investors are theoretically banned from crypto trading in China, their absence may not impede a bull run as large Chinese investors can operate abroad where trading is permitted. However, China’s QE measures could further devalue the yuan against the US dollar. It remains uncertain if China would allow further depreciation as the yuan is already at its lowest level in sixteen years. While it cannot be definitively predicted if there will be QE during bitcoin’s fourth halving year, it is an important possibility to consider when assessing future market trends.
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