Does the price volatility of Bitcoin have anything to do with major holidays?
Bitcoin, the king of all cryptocurrencies, has often had positive price movements during the Chinese New Year, or the Spring Festival, according to a recent research report by crypto trading platform Gate.io.
Bitcoin gained a staggering 2,000,000% over a seven-year period, with its price surging from $0.6 in early 2011 to an all-time high of almost $20,000 in late 2017.
Yet Bitcoin has continued a downward trend since the beginning of 2018, with its price slumping from the $17,000 level in January of 2018 to less than $4,000 at year-end.
Source: CoinMarketCap
Is the Bitcoin bubble about to burst? How will major events affect the Bitcoin price?
As the Chinese New Year approaches, the world’s largest annual human migration is about to begin. Will this major holiday affect the price of Bitcoin? A research by Gate.io Research seems to shed some light on it.
The research team at Gate.io made an analysis of Bitcoin price fluctuations during the Spring Festival from 2011 to 2018. It has been found that Bitcoin tended to post some gains on the first day of the first lunar month compared to a year earlier (with an average increase of 291.53%), except 2015 when the price of Bitcoin fell by 71%.
As shown in the table below, Bitcoin may rise or fall during the Chinese New Year. Yet the price of Bitcoin is inclined to perform better on the first day of the Spring Festival than one week before or after the date.
Bitcoin Price Fluctuations During the Spring Festival
Source: Cryptonews Hub, Gate.io Research
(Note: “-30” means 30 days before the Spring Festival and “+30” 30 days after)
In the first quarter of each year, the price of Bitcoin is still affected by market conditions of the previous year, such as market sentiment, government policy and investor interest.
The Spring Festival, however, seems to have a limited impact on the crypto industry as a whole, while in most cases the prices of cryptocurrencies are affected by particular events, such as government restrictions, crypto heist and hard fork.
During the Spring Festival in 2014, the price of Bitcoin posted some losses in the face of bad news surrounding crypto exchanges including China-based Gox BTC and Tokyo-based Mt Gox. In early 2016 when Bitcoin already saw an increase buoyed by the hard fork, the coin had been almost flat during the Spring Festival. Despite the particular price swings mentioned above, the price of Bitcoin has secured some gains one week before or after the Spring Festival since 2013.
