Bitcoin may surge 20% during the Chinese New Year starting Jan. 29 amid favorable market conditions, says crypto analytics firm Matrixport.
The company says Bitcoin has delivered gains for investors in 11 out of the past 12 years. Soaring market optimism over pro-crypto regulations after Donald Trump’s inauguration as US President also provide a favorable backdrop for possible gains this year, it added.
Bitcoin rose by 26% in 2022 and 23% in 2023 and Matrixport says the Chinese Lunar New Year is the “most favorable 20-day window” for Bitcoin.
China’s Impact On Bitcoin Growth Over The Years
The Matrixport report emphasizes China’s pivotal role in Bitcoin’s early growth, showing an increase in its share from 1.5% in the summer of 2012 to 10.8% in 2013. By the end of 2014, this figure had skyrocketed to a whopping 70.8%.
The impressive surge was driven by several factors, including “strict capital controls, the availability of capital, the development of large-scale BTC mining operations, and a speculative mindset prevalent among Chinese investors.”
The Chinese tech sector also made a significant impact by building mining rigs and increasing the number of validation nodes globally.
Matrixport: Bitcoin’s Current Price Shaped By Different Factors
Matrixport report reveals that the current Bitcoin position on the market is the result of different forces:
“On the technical side, daily reversal indicators reached oversold levels last week, hinting at potential support, while weekly indicators still signal the Bitcoin remains overbought.”
On the macroeconomic level, the Federal Reserve’s strict policies and reduced liquidity create challenges. However, the US Bitcoin Strategic Reserve under the Trump presidency gives an impression of positive support.
Matrixport report also noticed that after the Federal Open Market Committee (FOMC) meeting in December, the creation of stablecoins became lower than usual, which suggests lower fiat inflow.
Despite that, “Bitcoin funding rates are showing early signs of renewed activity,” according to the Matrixport report.
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