The crypto currency market is still recovering after losing more than $150bn following Bitcoin’s rapid decline. And, despite Bitcoin’s slow recovery to $32,300 – at the time of writing – the market cap slumped from a trillion dollars to circa $840 bn, according to Tradingview.com.
In the last few days, BTC went from a little over $35,000 plunging by $6,000 at just below $29,000.
Chinese festival causing fluctuation
It’s hardly the first time that the digital asset is witnessing this sudden drop. The current volatility poses a key concern as the Chinese New Year is nearing. Deemed as the “Chinese New Year Dump” by crypto traders, Bitcoin prices have consistently dropped in the weeks leading up to Chinese New Year since the last four years.
For instance, BTC prices dropped by 50% from $12,000 to $6000 in 2017. Similarly, prices slumped from $4000 to $3350 during the festival in 2019. Last year, it plummeted again to $8.3K and, it won’t be surprising if the pattern continues.
Reiterating the same sentiment, industry expert Dovey Wan believes that the reason why the Chinese New Year causes the dump is because the money is needed for the holiday time. As a result, Bitcoin investors sell-off their assets.
Wan further suggested that the fall could go as low as $23k this year. “so, let’s front run that HARD,” she tweeted.
Other investors such as RT’s Max Keiser Have said that this is an opportunity to increasingly buy the asset. He tweeted:
“I’ve been through three 90% corrections in #Bitcoin since 2011. This 30% drop doesn’t phase me one bit. In fact it’s fun. The only people who should be worried are those holding worthless shitcoins (and they are *all* worthless shitcoins).”
Bitcoin is not the only asset experiencing a downward graph. All altocins have seen a double digit fall. Ethereum, for instance, lost 10% falling to $1,150. Polkadot, which just dethroned XRP in market cap, has maintained its price at circa $16. XRP is down 9%, declining to $0.26.
With the Chinese New Year arriving on February 12, indeed all crypto eyes will be on Bitcoin’s price.