For the last 8 years, this Bitcoin Chinese New Year trade has been a winner
Bitcoin rallied to its highest level since August, with extended gains during the weekend ahead celebrations of the Lunar New Year holiday in Southeast Asia and the Spring Festival throughout Southeast Asia.
According to CoinMarketCap data, the flagship cryptocurrency jumped to more than $23,000 on Saturday. It gained as much as 10% compared to the previous day. CoinMarketCap reports that the coin reached a local peak of $23,282 – a level it has not seen in over five months. Bitcoin trades at $22,900 right now. This is almost flat in the last day.
Ethereum, the second largest cryptocurrency, saw significant gains. It reached a local peak of $1,674, an unprecedented level since September 2013, when the much-anticipated Merge upgrade was completed. The market capitalization has surpassed $1 trillion.
This rally is due to Bitcoin’s historical performance at the Lunar New Year holiday, which is celebrated in many parts of Asia. It is often called the Chinese New Year. Markus Thielen is Matrixport’s head of research and believes that the Lunar New Year holiday can be a good time to invest. He :
The average return on Bitcoin purchased at the beginning of Chinese New Year would be 9%. However, all eight years of 2015-2022 have shown positive returns. Long positions have found the Chinese New Year to be a good entry point.
Bitcoin and Ethereum have seen a 38% and 35% increase respectively year-to-date. Although a variety of factors may have affected crypto’s impressive start to the year, it managed to gain momentum following new data from the U.S. Department of Labor last Wednesday that indicated a cooling in inflation.
In December, the annual inflation rate was 6.5%, down from 7.1% in November. As it puts pressure on US Federal Reserve to slow interest rate increases, lower inflation is often viewed as a bullish sign for crypto and risk assets such as crypto.
Crypto bulls are expecting the market to continue its upward trend. Fundstrat’s head of digital asset strategies, Sean Farrell, expects Bitcoin to hit $35,000 to $44,000 and Ethereum to hit $2,400 to $3,000. He warned investors to be cautious about near-term risks. He stated:
“Despite the fact that majors have reached their absolute lowest levels, there are still risks we need to be aware of in the near future. These include further fallout from DCG and another swipe at risk assets at FOMC’s next meeting. We also believe that we are still in what we consider an on-chain bearish market despite recent rallies.