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Year of the Dragon Dawns Breathing Fire into Bitcoin Price: Here is BTC Price Every Chinese New Year

Last Updated February 10, 2024 7:09 AM
Teuta Franjkovic
Last Updated February 10, 2024 7:09 AM

Key Takeaways

  • Bitcoin hits a one-month high as East Asia celebrates the Year of the Dragon, a symbol of prosperity.
  • Bitcoin ETFs buy over $1 billion, absorbing selling pressure.
  • Miner selling also slows down, boosting market confidence.
  • Analysts predict Bitcoin could reach $48k soon.

In the coming days, East Asia will commence celebrations for the Year of the Dragon , regarded as one of the most auspicious and prosperous signs in the Chinese Zodiac.

As East Asia welcomes its grandest festival of the year, the largest cryptocurrency by market capitalization hit a one-month peak , coinciding with the onset of  one of the most important times of the Chinese Zodiac.

Bitcoin’s Surge Linked to Chinese New Year and ‘Dragon’ Memes, 

The Mandarin Chinese term for dragon, which in English sounds akin to “long,” has spurred interest among cryptocurrency traders.

According to a recent analysis  by 10X Research, Bitcoin’s price is projected to climb as high as $48,000 in the days ahead, leveraging the historical pattern of gains observed around the Chinese New Year.

The forecast anticipates a minimum surge of 11%. Over the last two weeks, Bitcoin has witnessed nearly a 15% increase, mitigating previous losses amidst the hype around anticipated Bitcoin exchange-traded funds (ETFs), which eventually led to a “sell-the-news” scenario.

This uptick, marking Bitcoin’s peak  since January 12, coincides with record-setting performances by the S&P 500 and Nasdaq-100 indices.

Bitcoin peaking
Credit: Bloomberg

Bitcoin on the Cusp of Hitting $48,000 Amid Market Recovery

Bitcoin’s recent surge to a one-month high represents a significant milestone, marking the end of a correction phase  where the digital currency had dipped to $38,500 towards the end of January.

Thielen employs  the Elliott Wave theory , a method of technical analysis that predicts future price movements through the identification of recurring wave patterns. He observes that Bitcoin has concluded its fourth wave retracement at $38,500 and is embarking on the fifth impulsive phase of its bullish trajectory.

Thielen’s projection sees the cryptocurrency escalating to $52,000 by mid-March, suggesting a strong upward momentum in the weeks ahead.

Thielen also projects  that the bullish trend for Bitcoin will extend into 2025, with the peak of this upward movement expected to occur between April and September of that year.

Bitcoin ETFs Counter Selling Pressure with Over a $1 Bn in Purchases 

In recent weeks, various Bitcoin exchange-traded funds (ETFs) have successfully absorbed over a billion dollars in Bitcoin selling pressure, showcasing significant demand for the cryptocurrency. The on-chain analysis firm CryptoQuant  observed in a Thursday report that the flow of Bitcoin from miner wallets—a sign of selling activity—has decelerated.

Recent analysis highlights Bitcoin’s recovery  above a crucial threshold, marking the first ascent since the retracement that followed the ‘ETF hangover’ beginning on January 12th.

Additionally, traders have noted that the recent behavior of Bitcoin’s price has alleviated concerns of an impending sell-off, pointing to the currency’s strong performance in weekly trends as a sign of market resilience.

Chinese New Year and Bitcoin: A Historical Look at Price Performance

China’s Lunar New Year, which occurs on varying dates each year, signals the start of a week-long national holiday, commonly referred to as “Golden Week.” Historically, this time frame has been associated with increased volatility and reduced trading volumes in the cryptocurrency market. In 2024, Golden Week is scheduled from February 10th to February 17th.

The following table outlines the behavior of Bitcoin’s price  during past Chinese New Year Weeks:

Year Pre CNY High CNY Low Change
2022 38,557 36,482 -5.38%
2021 $48,025 $44,187 -7.99%
2020 9,124 $8,245 -9.63%
2019 3,492 $3,398 -2.69%
  •  Regardless of the scale of the decline, whether it was a modest drop of about 8% in 2016 or as significant as 50% in 2018 during a bearish market trend, Bitcoin prices have shown a pattern of falling around the Chinese New Year.
  • In 2017, the period leading up to the Chinese New Year also witnessed a downturn in Bitcoin’s price.
  • The Chinese New Year in 2018 fell on February 16th, marking a substantial decrease in price prior to the holiday. It took over two and a half years for the market to fully recover from this setback.
  • In 2019, Bitcoin’s value decreased  from $3,491 just before the holiday to $3,397 during the festivities.
  • In 2020, the trend continued with prices dropping below the $8.3k resistance level prior to the Chinese New Year. There was a brief recovery to $8.5k on the first day of the holiday, but the price fell below $8.3k again the same day, with significant recovery only observed on the holiday’s final day.
  • Conversely, 2021 saw a shift in this pattern, with Bitcoin’s price gradually rising from $32k to $39k in early February, followed by a substantial surge to $48k just before the festival. Despite a slight retracement to $46.2k during the Chinese New Year, the gains from the pre-holiday rally were largely maintained.
  • In 2022, Bitcoin experienced a significant decline, dropping to below $37k just before the Chinese New Year holidays. Prices then saw a sharp increase, reaching over $39k during the mid-point of the holiday period. Nonetheless, this surge was fleeting, as prices fell dramatically to $36.5k by the holiday’s end, effectively reversing the gains made earlier in the week.
  • In 2023, Bitcoin prices experienced a surge just one day before the Chinese New Year, reaching a high of $23,282.40 on the first day of the holiday. Throughout the holiday period, prices oscillated between the $22,500 and $23,000 range, eventually closing at $22,437.68.

Bitcoin Soars as Large Investors Accumulate Like It’s 2021 Again

The recent rally in Bitcoin’s price is associated with a surge in holdings among wallets with 1,000 or more BTC, which have seen their highest level of accumulation in over 14 months, signaling a resurgence in investor confidence.

Additionally, there’s an uptick in Bitcoin’s social volume , indicating growing interest and discussion around the asset.

Despite Bitcoin’s recovery and its sustained dominance in the cryptocurrency market, on-chain data points to ongoing skepticism among traders toward Bitcoin for the third week in a row.

A particularly striking observation is the ratio of Bitcoin held on exchanges, which has dropped to its lowest since December 2017. This trend suggests that investors are inclined to hold onto their tokens, anticipating future gains rather than selling in the current market.

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