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NEW DELHI (CoinChapter.com) — Celebrate the Chinese New Year by buying Bitcoin (BTC), and historical price action suggests the trade would return 9% profits in just ten days, said a report by digital assets financial services firm Matrixport.
The report stated that the buying and selling pattern at the beginning of the lunar new year had a 100% hit rate between 2015 and 2022. Markus Thielen, head of research at Matrixport, noted that risk assets like crypto have started outperforming “traditional finance assets once again” in 2023.
If history is any guide, then investors could buy Bitcoin this coming Sunday Jan 22, 2023 and sell it 10 trading days later on Wednesday Feb 1, 2023 for +9% higher.
Thielen claimed in the report.
Thielen speculated that an increase in the number of transactions might be a reason behind the crypto market rally. The report reasoned that increased transactions resulted in the burning of more tokens, thereby increasing the price of the underlying tokens.
Additionally, Thielen highlighted Ethereum’s bullish cues, noting that the blockchain made “net positive revenue,” deflationary ETH, and positive yields for ETH holders served as bullish cues for Ether prices.
Furthermore, the likelihood of an eventual reversal of the Federal Reserve’s hawkish policies has helped Bitcoin’s price action, Thielen noted. As such, Bitcoin and the wider crypto market might continue their rally.
Interestingly, many traders take lunar cycles into consideration while trading. Moreover, several traders have conducted independent Research on the correlation between lunar phases and crypto markets.
Hence, the suggestion to buy Bitcoin at the beginning of the lunar new year might attract many traders.
Analyst Warns Current Bitcoin Rally Unlikely To Continue
Meanwhile, IntoTheCryptoverse founder and crypto analyst Benjamin Cowen has warned that the ongoing Bitcoin price rally might not be sustainable. In a YouTube video, Cowen reminded users of BTC’s early 2020 price trajectory.
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To recap, BTC price reached a high of $10,500 in mid-Feb 2020 before dramatically dropping to a low of $3,850 about a month later in Mar. Cowen considers the 2020 price action relevant since it was the only other time in history that BTC price faced pressure from a recession or recession-like condition.
Furthermore, the crypto analyst predicted that BTC price could range between $16,000 and $30,000 before “BTC price could sweep the lows, it could put in a higher low, it could put in a lower low.”
BTC Price Highest In Five Months
Bitcoin price is crabbing after rocketing past $22,000 on Jan 20. The bulls seem to be consolidating above the recently flipped resistance before launching the next offensive. The rally helped BTC price reach its highest level since Aug 19 last year.
BTC bulls ignored overbought RSI levels for the second consecutive week, currently at 80.72 on the daily charts.
BTCUSD daily chart with RSI. Source: Tradingview.com
Market participants traditionally consider an overbought RSI level a sign of impending bearish trend reversal. Hence, traders often start selling when the RSI goes above 70. If sellers enter the market, BTC price might face a drop to support near $21,900.
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Furthermore, breaching below the immediate support level could force BTC price to needle below its 200-day EMA (green wave) and test support near its 20-day EMA (red wave) at $20,500.
Conversely, Fed-pivot rumors, lunar new year buyers, and other bullish cues could help Bitcoin price break above resistance near $23,200. A break and hold above immediate resistance might help raise BTC price rise by nearly $2,000 to reach resistance near $25,240 before corrections pare gains.
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