5% Bitcoin Drop Is ‘Nothing Special’ During Chinese New Year, BitMEX CEO Says Time To ‘Nosedive’
- Chinese New Year falls on January 25th this time and will herald the start of the year of the Rat meant to symbolize new beginnings
- “Dealers expect a quiet market due to the holiday”, crypto analytics firm, Skew
- Altcoins in deeper red except for Tezos and NEM
Bitcoin price has lost 5% of its value since yesterday's high of $8,780. Today, we went down to $8,340 level on Bitstamp.
someone on @Bitstamp got excited
— Josh Olszewicz (@CarpeNoctom) January 23, 2020
Average performance during and after New year
Chinese New Year for 2020 falls on Saturday, January 25th. This new year heralds the start of the year of the Rat, the first animal of the zodiac believed to symbolize new beginnings, wealth, and prosperity in Chinese culture.
At the time of writing, BTC/USD has been trading at $8,416 while managing the daily trading volume at $695 million. However, a loss like this is “nothing special” during or after the Chinese New Year, notes economist and trader Alex Kruger.
Previously he shared that unlike how some people think the Chinese New Year may impact the bitcoin price negatively as people sell their BTC to purchase presets, Data indicates the digital asset does not underperform preceding the Chinese New Year.
As we have already seen, from January 3rd’s $6,850, on Jan. 19, we climbed to $9,200, a level last seen in early November 2019. Notable underperformance has been rather expected between Jan. 12 and Jan. 17 when BTC price soared over 12%.
During and after the new year, however, the average performance has been rather cold with a daily average return of 0.6%.
Get ready for a plunge in volatility and volume
In anticipation of Chinese New Year, crypto derivatives exchanges BitMEX CEO Arthur Hayes has called for a plunge. While wishing Happy New Year in Chinese, Hayes said volatility and volume both will be declining.
Volume has already started dragging, from last week's $1 billion on top ten exchanges with real volume, as per Messari, yesterday we went down below $500 million.
新年快乐 The year of the rat starts this weekend. Time for #Bitcoin volatility and volumes to nose dive.
— Arthur Hayes (@CryptoHayes) January 23, 2020
As for the volatility, data analytics platform Skew, notes,
“Sellers of short-dated puts ahead of the Chinese new year putting pressure on implied volatility. Dealers expect a quiet market due to the holiday. The spot market is telling a different story & trades down a couple of % today.”
Altcoins fall even harder except for two
As Bitcoin takes a red turn, altcoins that have been enjoying a rally much harder than the world’s leading cryptocurrency have taken a u-turn as well.
Top 35 coins are all in red except for Tezos (XTZ) which is up 4.46% in the USD market and 7.54% against BTC. XEM (NEM) is another exception with 3.15% and 6.22% gains in the USD and BTC market respectively.
The biggest losers of the market are those that rallied the hardest in the past few days. Bitcoin Diamond, Bitcoin Gold, Decred, and Bitcoin SV are down between 9% to 12%.
Bitcoin’s loss is certainly not altcoins’ gains rather worse for these cryptocurrencies.