Bitcoin News: History Hints at 20% Rally for BTC This Chinese New Year – Crypto News Flash
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- China’s current economic stress condition and liquidity push by the PBoC could propel Bitcoin price to new highs by the month’s end.
- Analysts highlight BTC’s ongoing re-accumulation phase, projecting a potential rally to $150,000.
Over the past week, the Bitcoin (BTC) price has seen some volatility oscillating in the range of $101K to $106K, while bulls eye a potential breakout to fresh all-time high levels of $110K. Market analysts believe that during the Chinese New Year i.e. by January end, the BTC price can rally by another 20%. This coupled with the growing speculation of a strategic Bitcoin Reserve could serve as an additional catalyst for the rally ahead.
Will Chinese New Year Push the Bitcoin Price Higher by 20%?
Historically, the Chinese New Year (which will begin on January 29) has proven to be a bullish period for Bitcoin. As per the Matrixport report, in 11 out of 12 past Chinese New Year, Bitcoin has delivered positive returns achieving a staggering 83% success rate. This is basically due to heightened trading activity during this period thereby driving greater demand for BTC.
On the other hand, on-chain analytics reveal China’s stronger influence on Bitcoin in the early years. During 2014, China alone accounted for a massive 70% of the global BTC trading driven by strict capital controls, speculative investment activity, and extensive mining operations. Furthermore, China’s tech industry was a major contributor in developing the mining equipment thereby expanding the global network of validation nodes.
According to our recent analysis, the Chinese economy has been under stress for a while with the central bank making immediate efforts of liquidity easing. The economic stress coupled with the liquidity push can push more Chinese investors towards adopting BTC and other crypto assets.
Key Macro Factors to Watch Ahead
The Matrixport report also mentions that a confluence of macro factors will play a role in deciding the Bitcoin price movement moving ahead. On the macroeconomic front, the Federal Reserve’s hawkish stance and tightening liquidity conditions pose significant challenges. However, while speaking at the World Economic Forum in Davos this week, President Donald Trump said that he would ask the Fed for immediate rate cuts to kickstart the US economic engine.
Furthermore, Donald Trump has signed a number of executive orders this week announcing to building a digital asset stockpile, which has also bolstered the market sentiment, as highlighted in our previous article. Additionally, expectations of a U.S. Bitcoin Strategic Reserve under a pro-crypto Trump presidency provide bullish momentum.
Furthermore, popular crypto analyst Rekt Capital noted that BTC appears to be entering another re-accumulation phase ahead of a potential continuation to new all-time highs. The last re-accumulation phase occurred post-halving, during which Bitcoin surged by 46% upon breaking out.
If a similar breakout occurs from the current re-accumulation phase, Bitcoin’s price could rally to approximately $150,000, as mentioned in our previous news brief.
