Bitcoin (BTC) follows market cycles same as every other market. It is thus no stranger to seasonality and as we have seen in the past, BTC/USD has a way of rising and falling around certain times. One of such periods is the weeks before and after the Chinese New Year. Considering that we have a solid seasonality pattern that has been following year after year, it is surprising to see that very few people are talking about it. Even those talking about it are analyzing it in the wrong light trying to deduce whether Bitcoin (BTC) falls or rises before the Chinese New Year. Bitcoin (BTC)’s historical price action around the Chinese New Year shows the price both rising and falling in a certain manner that has repeated throughout its trading history.
The Chinese New Year of 2012 was on 23 Jan. If we look at the price almost four weeks before that date, the price was not rising, it was falling. This is because Chinese New Years are about sharing, celebrating and exchanging gifts. This means that investors cash out of their investments well before the New Year in order to have funds ready to partake in festivities of the New Year. Coming back to Bitcoin (BTC), we have seen this pattern repeat every single year. The price falls almost four weeks before the Chinese New Year. Previously, it might have actually been because of Chinese investors cashing out of Bitcoin (BTC) but after China’s aggressive bans on Bitcoin (BTC) and other cryptocurrencies, it is unlikely that this is a direct result of Chinese selling. In fact, professional investors just picked up this pattern to stay on the safe side and thus it kept on repeating.
Every single year in Bitcoin (BTC)’s trading history the price has declined almost four weeks before the Chinese New Year.