it might be chinese new year dip which we have been having for past 4-5 yearshttps://imgur.com/a/3Ki7CyNFor example, in 2017, prices dropped by 50% from $12,000 to $6000 right before the festival. This pattern has referred to as the “Chinese New Year Dump” by cryptocurrency traders.In 2019, Bitcoin prices dropped steadily from $4000 to lows of $3350 right before the Chinese New Year. This is shown by the chart below, with the red line marking the date of the festival.In 2020, prices again dropped before Chinese New Year, even breaking the initial resistance of USD$8.3k. And whilst it did rally up to USD$8.5k on the first day of Chinese New Year, history cannot help but repeat itself, and within the same day plummeted back below USD$8.3k. Prices remained stagnant during the 2nd day of Chinese New Year, and only making a marked recovery and upward trend on the last day of the holidays.One of the possible reasons for the dip in Bitcoin prices is that people are “Cashing out” for the holidays. This is especially true in China because during the festival, lucky packets packed with cash are traditionally given out to children and the elderly. These “red packets” are meant to symbolise luck and prosperity, and is the only time giving cash is not taboo in China.Tradition dictates that married couples should give out red packets to young unmarried children, elderly and service personnel. Company Executives and managers should also give money to their subordinates – with some packets being filled to as much as the employee’s monthly wage.Due to the huge amount of cash money required, some suspect that this tradition is responsible the increase in Bitcoin Sell orders before Chinese New Year.
Submitted January 27, 2021 at 10:32PM
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