Chinese New Year Bump Lifts Bitcoin Again

James Hydzik

9 February 2024 - 12:38

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The Chinese New Year brings on an optimism that once again has lifted cryptocurrencies.

Chinese New Year Bump Lifts Bitcoin Again

The Chinese New Year is a time of optimism in southeast Asia, and this can result in a lift in cryptocurrency prices. The 2024 new year celebration has given the market much to be thankful for as Bitcoin prices have surged to heights not seen recently. While the introduction of Bitcoin ETFs has driven the market, it’s the surge of optimism that has BTC rising toward $47.000.

Or is it the markets?

Chinese New Year optimism is unlikely to be the driver behind rises in the American equities market. Be that as it may, the S&P 500 hit the 5,000 mark for the first time in its history on February 8. The S&P run has been led upward lately by earnings and jobs reports as well as agreement on the part of analysts with positive outlooks from green energy companies. The Fed has also weighed in with its announcement that the economy is strong enough to not warrant an interest rate drop in the very near future.
Most markets in eastern Asia were closed for the new year, though Japanese markets were open. Japan’s benchmark Nikkei 225 rose 0.5% to 37,029.91 briefly, which is a 34-year high. The move comes from Bank of Japan comments regarding interest rates.
So, did the equities rise affect cryptocurrencies? Possibly. For one thing, the 5,000 point S&P level is a purely psychological issue. 5,000 is just a number, and not much higher than the 4995.06 of the February 7 close. Sentiment is a thing, though, and 5 is bigger than 4, so it’s good. This sentiment, as, changes perceptions. Joblessness is declining in the U.S. overall, and high-profile large-scale layoffs are not generating the negative sentiment they did even a few months ago. Cryptocurrency also benefits.

So, how high will Bitcoin go?

Current estimates regarding this current rising trend for Bitcoin range from $49,000 to $300-500,000. However, even discounting visions of a Super Birth Cross that might have floated across technical discussions, the bulls seem likely to run for a while longer.

About that Chinese New Year Bump Thing

It exists. Really! It’s been noticed for a couple of years, at least, but Markus Thielen, head of research at Matrixport and founder of 10x Research posts on his X account that there is a roughly 11% jump beginning with some pre-holiday buying followed by selling in the week or so afterward. Crypto makes or a good new year gift in parts of the world that celebrate it.
The yearly rise is as volatile as anything else in the world of Bitcoin, ranging from a low of 3.3% in 2019 to a high of 24.3% in 2021, but since 2015, it’s been there. Coindesk notes that Bitcoin cleared a key resistance level around $44,000 on Wednesday. Thielen sees technical reasons for BTC in the low 50s in March. But that would be the basis for another article, and one not tied at all to the Chinese New year.


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