Bitcoin Nears ‘Double Botttom Breakout’ Ahead of Key US Data, China Stimulus

Bitcoin (BTC) is on the verge of a “double bottom breakout” after ascending by over 20% two weeks after forming a local low of around $52,500. The bullish outlook appears as investors closely monitor major economic events in the United States and China.

US Economic Data and Fed Outlook

Bitcoin traders are waiting for a batch of crucial US economic data this week, including the personal consumption expenditures (PCE) gauge, a key inflation metric for the Federal Reserve, and jobless claims data.

Recent remarks from Fed Governor Christopher Waller suggest that the Fed will likely cut rates further, potentially by a quarter-point, in the November and December meetings. However, if labor market data on Sep. 26 reveals further signs of weakness, a larger half-point cut could be considered.

Waller’s comments reflect growing concerns that the US economy might be slowing, thus influencing the Fed to take more aggressive action to stimulate growth. The central bank had already made a quarter-point rate cut last week, which investors see as a signal of more dovish policy soon.

Bitcoin rose by over 10% after the rate cut.

China’s Stimulus Moves

Meanwhile, China has taken steps to boost its economy as concerns grow that the country might miss its annual growth target of around 5%. The People’s Bank of China (PBOC) made a surprising move on Monday by lowering the 14-day reverse repurchase rate, signaling further monetary easing. This follows cuts initiated in July.

Adding to the anticipation, Chinese authorities announced that Pan Gongsheng, the governor of China’s central bank, will hold a rare press briefing alongside two top financial officials to discuss financial support for economic development. The announcement has fueled speculation that Beijing may ramp up its stimulus efforts to address the economic slowdown.

China’s stimulus efforts to revive growth could improve global economic sentiment. Risk-on assets like Bitcoin may experience price appreciation as investor confidence increases due to a more optimistic outlook for global economic stability.

Double Bottom Breakout for Bitcoin

Bitcoin’s chart pattern suggests a potential breakout could occur in these macroeconomic developments.

The chart shows a “double bottom” formation, with two lows in June and September marking the pattern’s base near $56,000. The resistance level, currently around $64,000, is a critical zone for traders to watch. A successful breakout above this resistance could push Bitcoin toward the $77,500 target, representing the full height of the pattern’s range.

Bitcoin’s current position above both the 50-day (approximately $60,339) and 200-day (approximately $59,518) exponential moving averages (EMA) further strengthens the bullish outlook. With the Relative Strength Index (RSI) hovering near 64, the cryptocurrency may have more room for upward movement before entering overbought territory.