Bitcoin is expected to hit a new all-time high within two months, or by September, as the People's Bank of China (PBOC) unexpectedly cut its benchmark interest rate to stimulate economic growth, and prominent traders are hyping up the prospect that the cryptocurrency will hit a new all-time high within two months, or by September, highlighting that China's move has become a bullish catalyst for the cryptocurrency.

CryptoSlate reported that amid continued challenges in the real estate sector and the broader economy, the People's Bank of China lowered the seven-day reverse repurchase rate from 1.8% to 1.7%, the one-year loan prime rate (LPR) from 3.45% to 3.35%, and the five-year loan prime rate (LPR) from 3.95% to 3.85%.

The rate cut, which comes after second-quarter gross domestic product grew at a slower-than-expected 4.7 percent, is aimed at addressing weak consumer demand and deflationary pressures. The real estate sector remains reeling, with major developers facing financial difficulties, with mixed reactions in Asian markets.

As soon as the news of US President Biden's withdrawal from the November election came out, the price of Bitcoin rose from $65,800 to $68,500 a few hours later, but by the time China announced its withdrawal, Bitcoin had fallen back to around $67,800. After the news of the rate cut came out, the price of Bitcoin rose by about 0.5%, but then fell slightly.

Lower global interest rates are a key factor in the performance of risky assets, including cryptocurrencies. According to CoinTelegraph, the United States has not yet followed China and Europe in starting a rate cut cycle, which the market expects to begin in September.

“Today’s rate cut was an unexpected move, likely due to the sharp slowdown in growth momentum in the second quarter and China’s Third Plenum’s call to achieve this year’s growth target.”

Market commentator Holger Zschaepitz responded by pointing out that it had been nearly a year since China last cut interest rates.

“Going into 2024, traders were betting on a massive coordinated global easing cycle that would reverse half or more of the tightening. Today, mid-July, almost none of this has materialized,” the report concluded.

Bitcoin itself faces one last set of resistance before setting a new all-time high, including the $69,000 level that has remained in place since the end of 2021.

“Bitcoin has almost erased the -25.6% retracement,” noted Rekt Capital, a well-known trader and analyst, in its latest analysis.

“It took two weeks to almost completely offset the five-week pullback.”