BitMEX CEO, Arthur Hayes, warned the crypto community about the approaching Chinese New Year, predicting a large drop in volatility and trading volume.
BitMEX CEO’s tweet causes commotion in the crypto community
Chinese New Year is only two days away, and the year of the rat is about to start this weekend. This was pointed out only hours ago by the CEO of BitMEX, Arthur Hayes, who said as much in his latest Twitter update.
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
However, apart from simply announcing the change in the calendar, Hayes also warns that low Bitcoin volatility is about to arrive, alongside a large drop in trading volumes.
Of course, this is not exactly new, and the crypto community encounters this same volatility of the BTC price every year at around this time. January is historically a bad month for Bitcoin price performance, losing an average of -5% loss over the past 10 years.
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As it is widely known, China has one of the largest populations in the world. Given that many of them are also extremely interested in cryptocurrencies — including people in and out of China itself — it is no surprise that their withdrawal from the crypto sector for a few days during which they celebrate the New Year, has significant consequences.
This was already seen in previous years, despite the fact that cryptocurrency trading is prohibited within China itself, as its people still manage to circumvent the trading ban in order to participate in the crypto space.
Does the Chinese New Year really have an impact on Bitcoin?
What you have to take into account is that most professional activities are significantly reduced in order for China’s people to celebrate the arrival of the New Year. There’s also an expectation that Chinese investors will sell off some of their bitcoin to cover associated festive costs. These are the fundamental reasons why people believe Chinese NY affects Bitcoin’s price.
The Chinese New Year will start this Saturday, January 25th, and the answer to the question of whether or not it has any impact on BTC price is likely to present itself in the following days.
For now, the Bitcoin price sits at $8,482, after experiencing a 2.36% drop in the past 24 hours. In the past seven days, the price has breached the $9,000 mark, reaching the $9,150 high before experiencing a sharp drop which was stopped by a support at $8.600. However, this support was broken several hours ago, and Bitcoin — just like the rest of the crypto market — currently trades in the red.
Do you think that Hayes’ prediction regarding the Chinese New Year is correct? Let us know in the comments below.
Image via Shutterstock, Twitter @CryptoHayes