Bitcoin (BTC) and other cryptocurrencies fell again in Saturday’s trading, following big declines all week.
After plummeting 6% over the last week, Saturday saw Bitcoin decline 1.70%. Nearly $10 billion has been wiped off of the value of the cryptocurrency markets over the last few days. However, analysts are telling investors not to be concerned. The reason? China
Unless you have just emerged from an internet-less cave, you will be aware of the coronavirus originating from China. With more than 11 million Chinese people on lockdown, the virus more commonly found in birds and pigs is spreading worldwide.
The growing uncertainty over the virus “factor” also comes at a very sensitive time for traders. Data reveals that historically Chinese New Year creates a bear market traditionally in stocks as well as creating sell pressure for Bitcoin.
No Surprises or Concerns From the Declines
Figures doing the rounds on Twitter and reported by Cointelegraph show that in the build-up to the Chinese New Year celebrations, Bitcoin, like stocks often go red and into the negative. Just last year, Bitcoin averaged around -0.2% losses for the week prior to the start of the New Year.
Despite crypto being banned in China, the world’s second-largest economy is home to the largest group of bitcoin miners in the world made up from one of the largest populations in the world. A growing number of Chinese traders have also managed to continue trading in the crypto markets of Japan and South Korea in order to circumvent the domestic crypto ban. Many of the traders and miners take time off around this time year, reducing volumes.
The declines have come as no surprise to many in the know. BitMEX CEO, Arthur Hayes, already issued warnings to the crypto community via Twitter about the approaching Chinese New Year. The crypto influencer predicted a considerable decline in both volatility, and in trading volume.
So, as we approach a traditionally bearish month in February, the declines in Bitcoin and other cryptocurrencies have more or less been predicted. The virus effect isn’t the sole cause for the declines, but it looks like being a major contributing factor in the scale of the declines.
