Analysts: Chinese New Year Could Intensify Pressure on Bitcoin

Chinese New Year, or Spring Festival, has historically had a negative impact on the market for the first cryptocurrency, according to experts.

Lenart Neo, head of the analytics department at Stack Funds, says that selling pressure will intensify ahead of the celebrations. In 2021, the holidays in the country are set from Thursday, February 11, to Tuesday, February 17. The Lunar Year of the Metal Ox will begin on February 12.

In recent days Bitcoin has fallen below $30,000 twice, but the cryptocurrency managed to hold the psychologically important level. Such volatility is expected to persist in the coming weeks, the expert says.

Neo added that, amid a pause in operations of most firms in the country for several days, Chinese miners will begin withdrawing funds in advance, selling Bitcoin. The growing miners’ position index (MPI) points to a possible price decline, he noted.

Miner Position Index looks enough to make a local top. They’re selling $BTC.

I’m going to punt a small short to scalp $BTC in this short-term bearish market.

Chart 👉 https://t.co/RbSJ9xbC56 pic.twitter.com/7RbQN7BgwW

— Ki Young Ju 주기영 (@ki_young_ju) January 10, 2021

Boxmining founder Michael Gu noted a historic bearish trend tied to the Spring Festival in China. He compared price highs in the four weeks leading up to its start with Coinbase quotes on the last trading day before the Lunar New Year.

Data: Boxmining.

The largest price drop was recorded in 2019. Since 2016, the rate has consistently declined on these days.

Today, January 29, a week before the start of the festival in China, Bitcoin rose by more than $6,000 in a few hours, reaching $38,620 (on the Bitstamp exchange). The rapid rise was linked to Elon Musk adding the Bitcoin hashtag to the description of his Twitter account, which has 44 million followers Bitcoin hashtag.

Earlier, Glassnode on-chain metrics indicating the end of the correction and the formation of an uptrend in the quotes for digital gold.

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