Bitcoin (BTC)'s rally has little to do with China developments - Expert opinion

Bitcoin (BTC) has entered a consolidation phase after wild gyrations of the previous week. At the time of writing, BTC/USD is changing hands at $9,334, mostly unchanged both on a day-to-day basis and since the beginning of Tuesday. A failed attempt to break above SMA5100 (Simple Moving Average) daily tamed down bitcoin bulls and allowed traders to take a breath. 

Many cryptocurrency experts and analysts keep seeking reasons for 42% jump that took bitcoin price to the highest levels since May 2019. While some experts tend to credit Chinese President Xi Jinping blockchain endorsement. However, there is little evidence that the new Chinese policy has anything to do with the recent crypto rally. 

According to Dovey Wan, a founding partner of Primitive Ventures and a well-known figure in the crypto Twitter, Western traders overreacted to Xi's comments. She pointed out to a considerable time lag between his speech and bitcoin's rally, and said that Chinese traders were unlikely to engineer the bull's run. 

"Please keep in mind that the average annual household income in China is $10k. For whoever is new to Bitcoin in China, 99.9% of the chance he/she will think Bitcoin is already "too expensive". That's why they first rush to stock, maybe cheap alts after seeing the Xi New," she tweeted.

Bitcoin's technical picture

On the upside, we still will need to see a recovery above SMA100 daily (currently at $9,620).Once this barrier is out of the way, $10,000 and the recent high of $10,484 will come back into focus. 

The local support is created by psychological $9,000 closely followed by a confluence of SMA200 and SMA50 daily at $8,900. A sustainable move below this area will trigger more sell-off and push the price towards $8,725 (October 25 high).
 

BTC/USD, the daily chart