on the crypto
Lunar Chinese New Year this year is February 12th. But unlike in previous years, some analysts and traders claim that the "Chinese New Year Dump", or the fact that the price of bitcoin (quotation BTC) drops during the holiday period in China, it won't happen this year.
Money is the protagonist of the holidays
"Chinese traders tend to withdraw their crypto assets and cash out before the New Year," said Alex Zuo, vice president of Chinese crypto wallet provider Cobo. "There is a decades-long tradition of giving money to family or friends [in China] during the Chinese New Year," said Felix Wang, chief executive and partner of investment research firm Hedgeye.
"They need cash, so they need to liquidate some of their financial holdings, and that could lead to some pressure in some financial markets." Liquidity is another concern.
Most businesses are closed during Chinese New Year week, including over-the-counter services and cryptocurrency trading counters because people in the Greater China region take at least five days off to get together with their families and celebrate. the party.
In 2018, the price of bitcoin fell to $ 5.947,40, down 37,2% from a high of $ 9.471,46 over the 14-day period. In 2019, the price of bitcoin fell to $ 3.346,14 for the same period, down 8,3% from a previous high of $ 3.648,50. For 2020, the drop was 10,5%, from $ 9.181,97 to $ 8.220,87.
Because 2021 could be different
The year 2021 will be the year of the ox on the Chinese lunar calendar, a bullish omen. While some may have sold their bitcoin, a large number of traders and investors in China, betting on a long-lasting positive market trend, appear to want to keep their BTC into the new year.
“This year's market has been very different from past years and we are seeing very little impact from [Chinese] retail traders,” said co-founder of the F2Pool mining pool, Shixing “Discus Fish” Mao.
“The current market is driven by institutional money and moves according to the sentiment of Western institutions. We cannot simply draw conclusions on the price trend of [bitcoin] based on the behavior of retailers ”.
An additional factor: China's crackdown on OTC banks
China's crackdown on over-the-counter (OTC) service is another potential reason fewer people are cashing in before New Year's Eve, local sources said. In fact, Chinese police recently froze OTC-related bank accounts and cards in conjunction with the Chinese government's crackdown on cryptocurrency money laundering.
According to an anti-money laundering report released on Feb.5 by Chinese blockchain analytics firm PeckShield, unregulated digital currency outflows, totaling $ 17,5 billion in 2020, increased 51% compared to 2019.
