The Chinese New Year Has Always Been Bullish for Bitcoin

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On January 5, 2023, we pointed out that the crypto market structure was improving and that “Ethereum could rally by +27% into the March Shanghai upgrade”. Our previous “Alpha Trades You Might Have Missed” report pointed out that several protocol specific positive catalysts and there is no surprise that the crypto market has rallied during the last 10 days.

🚩 A few bullet points:

👇 1) The Chinese New Year is about to start soon, what does it mean for Bitcoin?

👇 2) Buying Bitcoin at the end of the first day of Chinese New Year and selling it 10 trading days later would have returned +9%, on average, with all of the last eight years (2015-2022) showing positive returns.

👇 3) This is a hit ratio of 100% (8 wins, 0 losses). If history is any guide, then investors could buy Bitcoin this coming Sunday January 22, 2023 and sell it 10 trading days later on Wednesday February 1, 2023 for +9% higher.

Exhibit 1: Bitcoin Return from the Start of the CNY until 10 days later

Exhibit 2: Performance from the Start of the CNY until 5 days later

Exhibit 3: Performance from the Start of the CNY until 10 days later

👇 4) The accumulated average Bitcoin return shows that prices tended to rally by +12% when bought on the first day of the Chinese New Year and they peaked out around day 15-19.

👇 5) The “fasted” rise tends to happen during the first week. Both of the charts also show that the beginning of the Chinese New Year has been an attractive entry timing for long positions