Bitcoin (BTC), which is a cryptocurrency, traded at a similar level on Tuesday after China’s first reduction in benchmark lending rates for 10 months failed in its attempts to boost the mood on traditional markets.

The People’s Bank of China lowered its one-year and 5-year loan prime rates to 3.55% bps and 4.3% bps, respectively. The five-year rate is used as a reference for mortgages. China’s largest state banks cut interest rates for demand deposits last week by 5 basis points and 15 basis points on time deposits of three and five years. Basis points are one hundredths of a percentage.

Recent economic reports showed that the second largest economy in the world is losing momentum and is on the brink of deflation.

Bitcoin, which is purely a play on liquidity, has struggled to gain traction. According to CoinDesk Data, the largest cryptocurrency in terms of market value traded near $26,819 at 7:27 UTC, after failing to maintain gains above $27150 during Asian Trading Hours.

China’s benchmark stock index, CSI (China’s Standard Index), traded in a range of neutral to negative. The Australian dollar, sensitive to China due to its strong trade ties, fell by 0.7% to the U.S. Dollar. The broadest MSCI index of Asia-Pacific stocks outside Japan dropped more than 0.5%, and S&P futures were trading 0.3% lower.

Investors are taking a risk off action because they are not sure if the rate cut will be sufficient to boost the economy. They are therefore looking for an even bigger stimulus package.

In a recent market update, ForexLive analyst Justin Low stated that “that could be the markets way of saying the rate cuts tell more problems than they are a solution for China’s economic struggles.”

Crypto observers claim that a stronger stimulus from China could offset the hawkish tendencies of the U.S. Federal Reserve and the European Central Bank, ultimately pushing risk assets up.

Reports suggest that China has also been preparing a stimulus package of 1 trillion yuan. David Brickell is the director of institutional sales for Paradigm’s crypto liquidity network. He said this in Macro Pulse, the latest issue. A trillion yuan equals about $140 billion.

Brickell said that bitcoin’s price should rise if global liquidity increases.

Sheldon Reback is the editor.