Bitcoin has always had a special relationship with the Chinese New Year, which takes place today. The numbers show that the bitcoin price is booming during this holiday season.
How Bitcoin Traders Are Giving Hope to Chinese New Year
Before we look at the numbers, first an anecdote from 2017/2018. Bitcoin had just reached its all-time high at the end of December 2017 and after that the price started to fall dramatically. But many traders hoped, many against their better judgement, that February 16, 2018 would bring about a turnaround.
Then the Chinese New Year was celebrated and red envelopes full of money were traditionally distributed to the younger generations. Bitcoiners expected young traders to use the money from the red envelopes to buy Bitcoin and boost its price.
Bitcoin rose briefly, but it is impossible to attribute this to Chinese New Year. For a moment, anyone who publicly said anything about Bitcoin and Chinese New Year became a meme.
But that is not entirely fair, after all, it is only based on 1 Chinese New Year, it is not a trend.
Have a nice weekend for Bitcoin and Ethereum
Yesterday, the price of Bitcoin rose to 21,500 euros and in the meantime even deviated 11% compared to 24 hours before. Bitcoin reached its highest level in months, the price was 21,000 euros at the time of writing.
Ethereum, the second largest cryptocurrency, also posted good gains, reaching a local high of around USD 1,530. The price of Ethereum has not been this high since the launch of The Merge.
Bitcoin’s 9% Average Rise
But what does this have to do with Chinese New Year other than falling on the same weekend? According to Markus Thielen, head of research at Matrixport, the Chinese New Year weekend is seen as a good entry point for investors. He says:
Buying Bitcoin at the end of the first day of Chinese New Year and selling it 10 days later yields an average of +9%. Over the past eight years (2015-2022), this has led to a positive return. The start of the Chinese New Year is an attractive entry point for long positions.’
Bitcoin and inflation
Bitcoin and Ethereum are up around 38% and 35% since the start of 2023. While a combination of factors may have contributed to Crypto’s impressive start this year, the turning point seemed to be in the US. Last week, the US Department of Labor released data showing that inflation is cooling.
Annual inflation fell from 7.1% in November to 6.5% in December. Lower inflation is generally seen as bullish for risky assets like cryptocurrencies, as it puts pressure on the Federal Reserve to facilitate rate hikes.
What impact will Chinese New Year have on Bitcoin price in the next 10 days? Of course, history is no guarantee, but a 9% increase would be nice.
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Source: Btc Direct
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Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
