Key takeaways
Why is China adding liquidity?
China pumped $50 billion to support global financial markets, which were in decline.
Will markets recover?
The markets were seeing a shift in seasonality. Hence, the recovery was difficult to predict, especially after a bull year.
Liquidity is steadily increasing as different regions gradually inject capital into the global finance sector. Despite a 6.6% loss in the cryptocurrency market over the past 24 hours, investors responded with an infusion of capital.
Bitcoin [BTC] It fell below $100,000, and altcoins also fell, indicating that a weak financial market was the backdrop to the capital outflow.
China is pumping huge liquidity
China has recently begun pumping liquidity into global markets, indicating support for the current financial conditions. According to what was reported by Solana News On X (formerly Twitter), approximately 351.8 billion yen (about $50 billion) were added.
Meanwhile, CME Group data shows a 50% chance of a US interest rate cut to between 3.50% and 3.75% on December 10th.
In the United States, capital injections are expected, but on the condition of lowering interest rates.
Source: CME Group
Analysts said things are starting to change even with the Chinese capital infusion. However, the Binance founder has supported the long-term uptrend of the cryptocurrency markets.
Times are changing, but…
According to analyst Avocado, it is too early to declare the end of bull season. Instead, notice changing seasonal patterns in the cryptocurrency market.
He noted that Bitcoin is likely to remain resilient, while altcoins may face challenges, an outlook supported by on-chain data indicating that the market is currently in a mid-cycle phase.
In his note on X, avocado books,
“…Bitcoin cycle is on an extended timeline… Altcoins really look like they are going to struggle… It’s time to think beyond Plan B instead of denying reality.
Despite the changing market conditions, Binance founder CZ downplayed the impact of the declines, insisting that they were nothing to worry about.
While analysts acknowledged a shift in sentiment, CZ remained confident in continued market growth. It is useful:
“Every decline, some people think it’s the end of time. Time continues.”
Overall, the observations showed that although cryptocurrencies may face difficulties, the long-term outlook remains bullish. This was evident from on-chain activity in the derivatives and spot markets, as shown in the charts.
Huge walls are being built for tender, but are they enough?
Binance Futures data revealed large bid walls between $96,000 and $97,000, coinciding with the recent liquidity injection in China. This group reflects strong bullish activity, with over 2,800 BTC accumulated as buyers entered during the dip.
This price zone is located just above the monthly demand block. However, the supply wall had failed to maintain its level at the time of writing.
Source: Trading View
Overall, the data showed that markets were weakening despite the influx of liquidity. This means that the capital has not yet been priced.
As such, Bitcoin and other cryptocurrencies could recover.
