Bitcoin Price Surges Above $46,000, Boosted by Chinese New Year Optimism
Bitcoin Dominance
Bitcoin (BTC) crossed $46,000 early Friday, as the CoinDesk 20 Index (CD20), a measure of the biggest cryptocurrencies, jumped over 2%. The largest crypto by market cap reached a one-month high, conveniently aligning with East Asia’s biggest festive celebration – the Chinese New Year.
Crypto traders embrace the Year of the Dragon
Bitcoin’s recent surge can partially be attributed to the Chinese New Year, a period believed to be one of the luckiest according to the Chinese Zodiac. In Mandarin Chinese, the word for dragon is pronounced similarly to “long,” adding memetic value for crypto traders.
Predicted Gains and Historical Performance
Bitcoin is expected to climb as high as $48,000 in the coming days, given its historical trend of May surges during the Chinese New Year, predicts 10X Research. With this surge, the asset could experience a minimum gain of 11%.
Positive Momentum and Bitcoin ETFs
After facing earlier losses due to the underwhelming impact of bitcoin exchange-traded funds (ETFs), bitcoin surged by nearly 15% in the past two weeks. This rise coincided with the S&P500 and Nasdaq-100 indices hitting all-time highs, showing signs of a recovering market.
However, the recent surge in bitcoin price left some traders feeling apprehensive. The fear of further sell-offs was significantly alleviated when bitcoin rose above its 50-day moving average late Wednesday. This confirmed a bullish medium-term trend and dispelled concerns of a deeper correction.
Miner Wallet Activities and Market Confidence
Additional analysis by the on-chain firm, CryptoQuant, indicates that movements of bitcoin out of miner wallets, which typically suggest selling, have slowed down. This slowdown provides further reassurance to market participants.
As bitcoin and the broader crypto market display strength in their weekly movements, Alex Kuptsikevich, FxPro senior market analyst, notes that a prolonged period of consolidation has bolstered market confidence, paving the way for potential new highs.
