Year of the Ox and its impact on Crypto prices
The Chinese Spring Festival, which is called Chinese New Year (CNY) or Lunar New Year, is one almost all Chinese prepare for in advance. The period of the festival lasts for 16 days, counting from the festival’s eve.
This year, the Festival will be observed between February 11th and February 26th.
Companies dealing with the Chinese plan ahead of time, as the period is usually disruptive. Productivity is reduced greatly and all workers are looking forward to spending money on presents for family and friends, most commonly in the famous ‘red packets’ which contain small cash gifts.
The festival will surely affect companies depending on the Chinese factories, and that is if they have not made adequate planning ahead. Stock exchange experiences a notable drop-off days before the festival kicks off, only going back to normal when business fully resumes. The trend is also seen in Bitcoin and other cryptocurrencies.
Over the years, there has been a significant drop in the price of Bitcoin during the 14 days of Chinese New Year. Trading volumes on top crypto exchanges like OKEx in the past three years were down, as a result of a decrease in liquidity and increased withdrawal activities. The price of Bitcoin also went down during each of these years.
Year 2018: $9,471 — $5,947 (-37.2%)
Year 2019: $3,648 — $3,346 (-8.3%)
Year 2020: $9,181 — $8,220 (-10.5%)
On the Chinese Lunar calendar, 2021 is the year of the Ox. A large percentage of Chinese involved in trading and investing see the year as a bullish one, which is understandable since the year brings a bullish omen. This means they will likely hold their Bitcoins and think long-term.
It must be noted that the recent bull-run is driven by the U.S and European institutional investors, the probability of Chinese investors going against the trend to cause a dip during the festival is low. This is unlike the 2017 bull-run which was largely driven by retail investors in Asia.
The Chinese New Year festival for 2021 will not relatively have a major impact on the market compared to previous years, there are more investors in the mix now and it is unlikely that the Chinese investors will want to impede the bull as the new year belongs to Ox.
It’s a good a time as any to buy Bitcoin, Ethereum, OKB and other digital assets on OKEx. You can even send out OKB to your family and friends on OKEx as part of your Red Packet.
Happy holidays.
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