Chinese New Year Crypto Effect: Bitcoin May Stay around $3600 on the Upcoming Lunar New Year’s Day
It is just two weeks away from the Spring Festival, and the crypto market is holding its breath again because there seems to be a correlation between Chinese New Year and the prices of cryptos, especially bitcoins.
It is not surprising that crypto sell-offs will be triggered two or three weeks ahead of New Year holidays as a significant number of investors flock to exchange bitcoin for fiat currencies to fund the increased New Year-related spending, even though it is not easy for Chinese investors to cash out bitcoin due to the Chinese authorities’ blanket ban on virtual currency tradings.
Actually, bitcoin’s price movement has followed the same pattern for the past three years, experiencing a slump before the Lunar New Year that were followed by an upward trajectory.
A bitcoin investor said in China’s most popular bitcoin forum, 8BTC Forum, that Chinese usually cash out cryptos nearly 20 days before Lunar New Year’s Day, making Bitcoin price take a dump. But as the Chinese New Year approaches, bitcoin whales possibly buy more bitcoins at a lower price when many retail investors in China temporarily leave the market, driving up the price.
What’s more interesting about the Chinese New Year crypto effect is that an increase in bitcoin is more likely taking place on lunar New Year’s Day than in one week before or after it, according to the latest research report from the major crypto exchange Gate.io.
Besides, the reported released Monday by the research arm of Gate.io found bitcoin price of Lunar New Year’s Day registered a notable surge from the previous year’s first day of Chinese New Year since 2011(except 2015).
For example, the bitcoin price on Jan.28,2017, the Lunar New Year’s Day of the Year of Rooster, was up 147.99% from the price of 2016’s Lunar New Year’s Day , but during the 2017 Spring Festival, bitcoin stumbled thanks to China’s central bank issuing warnings to major bitcoin exchanges in January 2017. The Chinese New Year Day of 2018 which fell on Feb.2 saw a whopping 1006% rise in bitcoin price from a year earlier because the bullish run in crypto market in late 2017 dragged on well into the beginning of 2018.
The report also indicated that for the first three month of a year, the price fluctuation of bitcoin is impacted by the market environment of the previous year, including Investor sentiment surrounding crypto assets, regulatory measures, and public attention.
Researchers predicted bitcoin would possibly stay around $3600 on the first day of Chinese New Year 2019 which falls on Feb 5th, posting a roughly 64% drop from a year earlier.
Jiang Zhuo’er, founder of the prominent mining pool BTC.Top, previously claimed bitcoin price may bottom out at $3,000 sometime during the upcoming New Year holidays due to bitcoin halving.
Do you think the Chinese New Year will cause a bloodbath in crypto land again in 2019?