- Bitcoin’s September rally, when the cryptocurrency surged about 21%, was largely fueled by Chinese stimulus measures.
- Market participants are disappointed as China’s announced stimulus fell short of widespread expectations.
- Bitcoin was unable to hold above $64,000 as traders search for a fresh catalyst despite hopes for an “Uptober” rally.
The recent Bitcoin advance that began in early September — widely attributed to stimulus steps from China — has started to lose momentum. The largest cryptocurrency by market capitalization briefly topped $66,000 on September 27 but failed to sustain that level. By October 2 it dipped to $60,000 and was trading around $62,700.
Chinese stimulus
Although September is often a weak month for crypto, Bitcoin outperformed expectations last month, largely on the back of stimulus measures from the People’s Bank of China (PBOC) aimed at countering a slowdown in economic growth and responding to anticipated Federal Reserve rate cuts.
The PBOC cut rates on medium-term lending instruments and lowered the 7-day repo rate to encourage liquidity and support risk assets. In addition, mortgage rates and minimum down payment requirements for various property purchases were reduced to bolster China’s housing market.
Many investors had hoped the government would commit to a much larger, multi-trillion-yuan stimulus package. Instead, authorities said they would frontload 100 billion yuan from the 2025 budget and add another 100 billion yuan to support construction — a significantly smaller measure than market participants had expected.
Potential catalysts for an uptrend
Markets are closely watching for drivers that could reignite a broad crypto rally. The Federal Reserve’s 50-basis-point rate cut in September was viewed as a potential trigger for risk-on flows, but October has so far disappointed: Bitcoin has struggled to push past the $64,000 level, and institutional inflows into U.S. spot Bitcoin and Ethereum ETFs have softened.
Following the government’s stimulus announcement, Bitcoin slipped roughly 1% before recovering some losses during the London trading session. With expectations recalibrated after China’s more modest measures, the market now awaits clearer signals — whether from additional policy easing, stronger ETF demand, or other macro developments — that could sustain another leg higher.
In the near term, analysts and traders will be monitoring liquidity conditions, ETF flows, and any further policy actions from global central banks. Until a definitive catalyst emerges, price action may remain choppy as the market balances reduced stimulus expectations in China with the prospect of easier monetary policy elsewhere.