China Stimulus Could Ignite Altseason Rally
China stimulus could redirect fresh liquidity into altcoins, potentially sparking the next altseason rally. Global liquidity has a 94% correlation with Bitcoin, highlighting the impact of monetary easing. China’s M0 monetary base stands at $5.2 trillion, ranking third behind the US and eurozone. Recent data show China’s retail sales fell 0.1% month-on-month in July, fixed-asset investment plunged 5.3% year-on-year, and urban unemployment rose to 5.2%. Economists at Bloomberg, Nomura and Commerzbank expect the PBOC to launch China stimulus measures as early as September. Meanwhile, rising US five-year Treasury yields near 3.83% indicate lower risk aversion among investors. If China stimulus arrives amid resilient market sentiment, traders could see a rotation into risk assets. Altcoin market cap may surge, possibly breaching previous all-time highs.
Bullish
The prospect of renewed China stimulus is typically bullish for risk assets, including altcoins. Historical precedents—such as PBOC easing in 2020 and global COVID relief measures—triggered major crypto rallies. With China’s M0 base poised to expand and US five-year Treasury yields rising to around 3.83%, investor risk appetite is increasing. In the short term, anticipation of PBOC measures could drive speculative inflows into altcoins, boosting prices. Over the longer term, sustained monetary easing in the world’s second-largest economy should underpin elevated liquidity, supporting continued growth in altcoin market capitalization and the potential to surpass previous all-time highs.