Chinese New Year bitcoin trading is a guaranteed profit, researchers say

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Does an average return on investment of 9% sound interesting to you?

Turns out that’s exactly what the Chinese New Year has held in store for Bitcoin investors for the past eight years, according to a new report from digital asset financial services platform Matrixport.

Buying Bitcoin at the end of the first day of Chinese New Year and reselling it 10 trading days later would have returned +9%, on average, with the last eight years (2015-2022) showing positive returns, Markus Thielen, head of research at Matrixport, wrote in a note.

According to Thielen, this means that if the story continues, investors who bought Bitcoin on Sunday, January 22 and exited the position next Wednesday, February 1 could exit the trade with a profit of 9%.

“China has been a major influence on Bitcoin for many years,” Thielen told Decrypt. “When people get together, they talk.”

Historic Bitcoin Lunar New Year Earnings 2015-2022. Source: Matrixport.

As the chart above shows, the ten-day trading period after the Lunar New Year of 2017 was the most profitable in eight years, with gains of 15% during the holiday season, followed by 14 % in 2021 and 13% in 2016.

Bitcoin’s average cumulative return for the ideal time is around 15-19 days as prices trended up +12% when bought on the first day of Chinese New Year and peaked around the days 15 to 19, added Thielen.

Bitcoin’s Bullish New Year

After the turmoil crypto markets experienced in 2022, Bitcoin has defied all odds so far in January, with the price of the world’s largest cryptocurrency soaring around 38% since the start of the turmoil. ‘year.

Trading at $16,520 on Jan. 1, BTC hit $23,282 on Saturday and is currently changing hands around $22,900, according to CoinGecko.

If the pattern described by the Matrixport researcher continues, it would mean that, based on the 24-hour high of $22,948 on February 1, the price of Bitcoin could rise above $25,000.

It remains to be seen whether this scenario will materialize in reality, however, some experts, speaking of the current rally, have already warned of a possible bullish trap that could attract inexperienced traders.

The latest CoinShares report meanwhile outlined a fairly cautious approach investors showed towards Bitcoin investment products last week, with short positions dominating US inflows by a wide margin.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.

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