The impact of the Chinese new year on the price of Bitcoin

During the last week the cryptocurrency market has been hit by a wave of mass sales that erased almost all profits last week. With Bitcoin (BTC) showing a negative performance of 5% and several of the main cryptocurrencies averaging losses of up to 8%, everything seems to indicate that the market is entering what we call “the Chinese period.”

January 26 begins the year of the rat and it is quite normal to expect China to celebrate it big time. Despite its strict capital controls and its unfriendly regulations towards cryptocurrencies, the Asian country market represents one of the largest fractions in the industry, with several of its largest traders operating in alternate markets such as Japan and South Korea to circumvent government restrictions.

Even with the operational West, a strong mass of buyers is located in Asia and with the new year just around the corner it is not surprising that Chinese merchants move away a few days from cryptocurrencies, resulting in a deceleration of the promoted market for a decrease in prices and lower volumes.

After analyzing Bitcoin’s returns for the past 11 years, Timothy Peterson determined that the first quarter (especially January and February) are especially bad periods for the leading cryptocurrency by market capitalization. It is not surprising that these lapses coincide with the Chinese festive times that usually range from late January to mid-February.

Another interesting feature that we could find when analyzing the holiday dates from 2015 to 2019 was that, in 4 of the 5 new years, Bitcoin’s historical volatility was near its lowest point, these values ​​are still showing similarities to Past events with a volatility of the last 30 days rolling between 2.76%, values ​​reminiscent of those seen in September 2019 when the price of BTC was in the range of USD 10,000.

However, in this same analysis we noticed that the Chinese year-end periods orbited local caps or funds throughout the price history, followed by very marked trends. While past price actions do not determine future values, they always serve as a historical record that gives you a broader picture of the market in general.

Reference: https://es.cointelegraph.com/news/the-impact-of-the-new-chinese-year-on-the-price-of-bitcoin

Referencia: es.cointelegraph.com

Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.

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