With the knock of Chinese New Year at the door, Bitcoin is already showing signs of ups and downs to follow. History depicts that the price of Bitcoin decreases in the month of Chinese New Year. That said, we all know that Chinese New Year is based on the Lunar Calendar. That’s why it is celebrated on different days.
In 2020, the celebration begun on 25 January and ended on Monday 27 January 2020. But this year, this Chinese New Year festival will begin on 12 February 2020 and will end on 15 February.
By the time, many consecutive services remain closed, which leads to high volatility in the cryptocurrency. That’s why in this article, we’ll explain the trends and falling of the Bitcoin prices and why it happens. So, let’s start.
Chinese New Year: Does It Lead To Dump in Bitcoin HODLing?
When it comes to the volatile cryptocurrency market, we cannot decide whether the Bitcoin prices drop or fall. However, we cannot ignore the historical fact about cryptocurrency; we’ve seen the constant price dropping in the Chinese New Year holiday weekend.
This effect has often been termed as to be the opposite of the “Santa Claus rally”. In the case of a Santa Claus rally stocks markets and their performance seems to rise exponentially during the month of December. However, the contrary is true in the case of bitcoin and the Chinese New year, where, as the festival approaches, during the end of January or the start of February we see the price of bitcoin fall and be affected negatively. There are many factors like cashing in around holiday time, gains in February, Government regulations, BTC news in China, and other factors that additionally affect the price around this time.
Many popular exchanges like Binance, Huobi, and OKEx which also cater to Chinese users, have witnessed a drop in trading volumes around the Chinese New Year. According to Boxmining.com, “When large numbers of highly leveraged traders all bet on Bitcoin prices moving one way it creates an opportunity for other large investors (whales) to move prices in the…