8,800 Incoming... I said it before, and say it again:
Indicators are meaningless when the Chinese are just printing fiat money infinitely. You have to keep in mind the Chinese have been printing unlimited amounts of fiat at a faster pace than anyone else, but try to prevent it from leaving the country on the official fiat money exchange rates. They will try to maintain a fiat exchange rate fix as long as possible, so they maintain purchasing power, but it is really just like Monopoly money to them. Bitcoin/crypto may be a way of escape.
8,800? I mean why not right?
Yeah. Continuing devaluation and rumors of capital controls.
8,850 Why not??? Just print moar fiat! No problem!
It's not really the "money printing", its the loss of purchasing power (symptom of this though; devaluation and strengthening USD), and fear of being locked in to a devaluing currency. It's part of a bigger trend. Bitcoin is just a protocol and conduit.
Limitless Unrestrained money printing via fractional reserve banking = Loss of purchasing power. Even with the
fixed exchanged rate of CNY/USD. The thing is it is a fixed exchange rate = fake exchange rate; if all restrictions were lifted and we had a
free market exchange rate what you would see is exactly what your are seing in CNY/BTC.
Don't just blame "money printing" for the devaluing yuan. It is part of the currency wars & geopolitics. The rising USD puts pressure on the Chinese peg vs competitors like Vietnam, Sth Korea etc. (It isn't a fixed exchange rate but a pegged one. It is set daily.)
The Chinese also have a huge amount of debt in their economy. When demand for credit dries up or GDP declines, they just lower their reserve ratio requirements (amounts banks need to keep in reserve) when it wants the banks to lend more / extend credit. Again, probably not a good thing.
As I said, it isn't exactly the money printing but the loss of purchasing power and expectation of continued devaluation that are symptoms of this.
But you bring up an important point. A country can't have a pegged exchange rate, an open capital account and an independent monetary policy operating at the same time. This is called the 'impossible trinity'. It was this combo that 'broke the bank of england' (George Soros famous sterling short). In this situation, something has to give. China is trying to manage this & take the pressure of its economy by devaluing the Yuan, but as it does Chinese are incentivized to move their assets out of the country. This could lead to capital controls. The PBOC might also use FX reserves to defend their currency.