The Correlation of Chinese New Year & Crypto Pump
Crypto is a unique market that is vulnerable to both negative and positive events. Even though the market has lots of stereotypes for price actions, there are also some stress-tested events that directly or indirectly effect the sentiment.
Many veteran crypto investors believe in the full-moon cycles and the effects of them on our crypto ecosystem. On the other hand, there are also some people who focus on astrological occasions etc. When it comes to the effects of China, we have more options to have fun.
For example, Bitcoin mining has been a hundred times banned in China and the crypto news served it every single time. On the other hand, the symbols of each year in China, e.g., Water Rabbit for 2023, make people have some predictions over the year.
What about the New Year in China?
China’s New Year & Crypto Market
Interestingly, there are some groups working on the correlation between the new year event and crypto market sentiments. The results are really interesting:
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 by Markus Thielen, Matrixport - Hindustantimes
Basically, the last 8 years of market actions are in line with the New Year celebrations in China. When we consider the number of people and crypto adoption in China, we cannot underestimate the massive influence on the market.
Correlations on Chart
Although there are some years that sign a perfect bullish term with the arrival of Chinese New Year, there are some years that do not follow the trend.
When we consider the frequency of the event, it is not possible for the crypto market to start a bull-run in the first month to end in the last month of each year.
As the chart clearly shows us, the market have a tendency to be on the positive side. However, it does not necessarily mean that it will always be green. After some time, it becomes a self-fulfilling prophecy.
People enjoy correlating some separate occasions to each other. Depending on the market conditions, there may be more incline to buy crypto in these times but it does not have to repeat itself every single year. You decide if this year is a proof of correlation or just a coincidence 😉
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