Historically, the Chinese Lunar New Year or Spring Festival has had an impact on the Bitcoin market. Very commonly, the values of the commodity dip in the days leading up to the event, over the years.
Analyst at Singapore-based Stack Funds shed further light on Bitcoin’s success on upcoming holidays. Head of Research Lennard Neo predicted sales pressure to continue in the short term due to the Chinese New Year. Neo claimed, however, that business conditions would offer “good entry opportunities” for investors.
For the last seven days, Bitcoin has been down by around 12 percent, dipping under the $30,000 mark. The commodity has reached as low as $29,290 in the last 24 hours. However, bitcoin steadily rose up to over $31,900 – the highest since the last dip and is currently priced at $31,434 at press time.
According to Lennard Neo, such instability is expected to linger in the coming weeks and will begin to place pressure on further corrections to Bitcoin prices.
In addition, the analyst predicts that, in the midst of a week-long break, Chinese-based miners will continue to unload their funds, contributing to the sales burden. About 60 percent of the world’s Bitcoin mining pools are based in China, and according to the researcher, the Miner Place Index (MPI) has also risen, which indicates that Bitcoin has experienced a price downside.
Moreover, as of 10 January, the MPI hit values last seen in 2019, when Bitcoin unexpectedly dropped below the $14,000 mark.
Source: Crypto Quant
Focused on Bitcoin price fluctuations on Coinbase, Michael Gu of BoxMining recently noticed the long-term Bearish pattern that emerged as a result of Chinese New Year’s holidays:
Source: BoxMining/Michael Gu
In addition, according to Michael Gu, the Chinese Over-the-Counter (OTC) would stay closed throughout the festival, which may further trigger high market uncertainty.
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