Bitcoin Slumps Before Chinese New Year Like Clockwork

Bitcoin has shed up to 6% in a week. Mainly thanks to the Chinese New Year as well as the uncertainty over coronavirus, that commentators are suggesting.

Scrutinizing BTC price data along with the Chinese stocks’ performance on January 24, 2020. Light, a social media resource, said a slump in performance had spread to the digital currency.

Stocks Correlation Expresses BTC’s ‘Global Stage’

Bitcoin notes, over the past several days, that it has widely correlated with the Chinese stocks. Such kind of behavior is reminiscent of whatever many perceived as a response to the other global event — the Iran crisis — happened earlier this month.

Light commented –

“China coronavirus-driven risk-off blanketing Chinese equities… and Bitcoin. Iran correlation, now Chinese equities.”

The analysis summarized –

“If there was ever a statement to the effect, Bitcoin has now made it to the global stage.”

The Pressure Returns from Chinese New Year

In spite of authorities’ attempting to contain it, Coronavirus continues to spread beyond China. The authorities tried to impose travel bans as well as boost healthcare provision.

BTC/USD has lost more than 6% in the last week and at the current time, it’s trading at $8,300. The virus factor historically comes at a delicate time. The data reveals it with Chinese New Year creating sell pressure for BTC traditionally.

Compiled by the analyst and the trader Alex Krueger, the figures which are circulating on Twitter these days show that Bitcoin returns usually turn out negative in the run-up to the celebrations.

Last year, they averaged nearly -0.2% losses for the week ago, but Krueger appeared himself unperturbed by the results. He summarized on January 22, 2020, “Nothing special.”

According to the reports, critics have protested against the theory that BTC price action is influenced directly by the geopolitical or the other world events.

Nevertheless, issues which involve China tend to conspicuously impact the market, against the backdrop of the blanket cryptocurrency trading ban which has been imposed by Beijing in 2017. The nation still accounts for the majority of BTC mining activity.