This Bitcoin Chinese New Year Trade Has Been A winner for Last 8 Years

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Source:
Pixabay

Bitcoin
has
extended
gains
over
the
weekend
ahead
of
celebrations
for
the
Lunar
New
Year
holiday
and
the
Spring
Festival
throughout
Southeast
Asia,
rallying
to
its
highest
level
since
August.

The
flagship
cryptocurrency
surged
to
over
$23,000
on
Saturday,
gaining
as
much
as
10%
at
one
point
compared
to
the
earlier
day,
data
by
CoinMarketCap
shows.
The
coin
has
reached
a
local
high
of
around
$23,282,
a
level
not
seen
in
more
than
five
months.
As
of
now,
Bitcoin
is
trading
around
$22,900,
almost
flat
over
the
past
day.

Ethereum,
the
second-largest
cryptocurrency,
also
registered
significant
gains,
reaching
a
local
high
of
around
$1,674,
a
level
not
seen
since
September
last
year
when
its
much-anticipated
Merge
upgrade
went
through.
The
total
market
cap
has
passed
the
$1
trillion
mark. 

The
rally
comes
as
Bitcoin
has
historically
performed
well
at
the
start
of
the
Lunar
New
Year
holiday
celebrated
across
much
of
Asia,
often
referred
to
as
Chinese
New
Year.
According
to
Markus
Thielen,
head
of
research
at
Matrixport,
the
Lunar
New
Year
holiday
is
considered
a
good
entry
time
for
investors.
He said:

“Buying
Bitcoin
at
the
end
of
the
first
day
of
Chinese
New
Year
and
selling
it
10
trading
days
later
would
have
returned
+9%,
on
average,
with
all
of
the
last
eight
years
(2015-2022)
showing
positive
returns.
The
beginning
of
the
Chinese
New
Year
has
been
an
attractive
entry
timing
for
long
positions.”

Bitcoin
and
Ethereum
are
up
around
38%
and
35%
year-to-date.
While
a
mix
of
factors
might
have
impacted
crypto’s
impressive
start
this
year,
the
market managed
to
gather
momentum after
new
data
released
by
the
U.S.
Department
of
Labor
last
week
indicated
a
cooldown
in
inflation.

The
annual
inflation
rate
fell
to
6.5%
in
December,
compared
to
7.1%
in
November.
Lower
inflation
is
usually
viewed
as
bullish
for
risk
assets
like
crypto
as
it
puts
pressure
on
the
US
Federal
Reserve
to
slow
down
interest
rate
increases.

Meanwhile,
crypto
bulls
expect
the
crypto
market
to
continue
its
upward
movement,
Sean
Farrell,
head
of
digital
asset
strategy
at
Fundstrat,
anticipates
Bitcoin
to
reach
between
$35,000
to
$44,000
this
year,
and
Ethereum
between
$2,400
to
$3,200.
However,
he
has
still
warned
investors
to
be
wary
of
near-term
risks.
He
said: 

“Despite
our
view
that
the
absolute
lows
for
the
majors
are
in,
we
still
believe
there
are
some
near-term
risks
to
remain
cognizant
of.
These
include
additional
fallout
from
DCG,
one
more
swipe
at
risk
assets
at
the
next
FOMC
meeting,
and
the
fact
that
despite
the
recent
rally,
we
are
still
amidst
what
we
would
consider
an
on-chain
bear
market.”