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.
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’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.
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.
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:
|Pre CNY High
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.