As the bitcoin prices rose with the arrival of Chinese New Year, cryptocurrency experts believe the dip in bitcoin prices in January was because of the Chinese and South Korean crypto investors cashing out their cryptocurrencies for the celebrations. It has also been expected that the bitcoin prices will rise to $11,000.
Experts predict Chinese New Year will bring More Celebration!
With the celebration of Chinese New Year in the air, you can also feel it in the soaring prices of the bitcoin among other cryptocurrencies. There is certainly a correlation between Chinese New Year and the prices of cryptos, especially bitcoins.
Right from the time, the New Year holidays start approaching, the Chinese and South Koreans indulge in the exchange of bitcoin for fiat currencies. This leads to the prices of bitcoin to drop down. The dip in the bitcoin prices that we experienced in January was certainly a part of the natural bitcoin cycle, in anticipation of the New Year.
According to the Chinese New Year, this is the “Year of the Dog” that begins from February 16. Numerous experts have stated that, due to the frequency of exchange from crypto to fiat currency by bitcoin investors in order to fund their holiday season, it will have a significant effect on the cryptocurrency market.
A Lesson from the Past…
Since 2015, every year, a trend has been set inconspicuously where bitcoin loses its value in January and then in February regains it back.
With the price of bitcoin at $9,905 at the time, the New year has definitely begun.
Talking about the January month, it was good in the years from 2012 to 2014, whereas the performance of cryptocurrency was somewhat mixed in February. But, a new pattern has been set from 2015, the BTC’s value drops in January and gains it back in February.
The decline of about 26 percent in the bitcoin prices that we saw in January was the second biggest drop since 2015. Given the pattern of last three years, it has been expected that the prices of cryptocurrencies will see more gain this month.
However, the short-term technical outlook seems to be bullish with bitcoin having the potential to reach $11,000. At the same time, this rise above $10,000 might be just temporary.
Correlation between bitcoin price and Chinese new year?
The correlation of bitcoin price trend with Chinese New Year is nothing short of fascinating. Surely, it has been considered the biggest factor for change in bitcoin price. The Chinese new year bitcoin price has excited people and they consider it to be one of major factors for rise in bitcoin price.
However, some experts also believe that it’s not all New Year as the value of bitcoin dropped down below $5,900 from $17,000 at the start of this year. It has been believed that with this kind of crash, a correction was meant to happen, in fact it was long overdue.
What are your thoughts on Chinese New Year’s impact on bitcoin prices? Let us know your thoughts below in our comment section!
I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.