Analyst says Bitcoin price sell-off may occur as Chinese New Year approaches

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On Jan. 29, the price of Bitcoin (BTC) rose briefly to $ 38,500 before retracing the move and spending most of the day reclaiming $ 35,000.

The wild breakout in Bitcoin price was partly attributed to Elon Musk simply changing his Twitter profile to “#Bitcoin”, which Musk subsequently posted a cryptic tweet saying “In retrospect, this was inevitable”.

Dogecoin (DOGE) continued to make waves on Twitter and among crypto traders. After reaching a new all-time high of $ 0.078 on Jan 28, DOGE price corrected 41% before bouncing back to $ 0.045.

Daily market performance in cryptocurrencies. Source: Coin360

Developments related to DOGE and r / Wallstreetbets led FTX Crypto Exchange to create a Wall Street Bets (WSB) index that shows the price of Nokia (NOK), BlackBerry (BB), AMC Theaters (AMC), GameStop (GME ) and Silver (SLV), DOGE and the FTX token (FTT) using a weighted average of their prices.

The heroics of the popular Reddit group have also not gone unnoticed by the U.S. Securities and Exchange Commission, which has announced that it will be investigating the way Robinhood handles the trading of GME shares on its platform .

Bitcoin price remains strong despite the miners’ sale

Despite the recent volatility, institutional investors continue to show heightened interest in Bitcoin and are willing to pay a premium in order to gain exposure to CME’s Bitcoin futures contracts.

Even the selling pressure from Bitcoin miners, who sold at levels not seen since the BTC price of $ 14,000 in July 2019, failed to meet the rising demand. Unlike in previous years, miners’ bulk sales are not negatively impacting the long-term price of BTC, as data from CryptoQuant shows.

Bitcoin miner outflow. Source: CryptoQuant

According to Lennard Neo, research director at Stack Funds, the current miners’ sell-off is likely to continue in the short term due to the upcoming Chinese New Year holidays.

Neo said:

“Miners increasingly leave their positions as vacation approaches. This also suggests that the minimum price that miners comfortably hold bitcoins at has not yet been found, and we expect this volatility to continue in the coming weeks. “

The growing interest from institutions and the advent of DeFi are big drivers of Bitcoin price growth. As the market moves into the Chinese New Year holiday, the main support level is at $ 34,000, while any spike is likely to face resistance at $ 38,000.

The $ 4.9 billion BTC futures, which expired on Jan. 29, appear to have had little impact on the market as last week’s Robinhood review paid more attention to the cryptocurrency industry.

Traditional markets were hit by a new blast that resulted in the worst weekly performance of the S&P 500. The Dow, NASDAQ and S&P 500 ended the day negative, down 2.03%, 2.0% and 1.93%, respectively.

Altcoins are showing signs of growth

While Bitcoin price struggled to maintain $ 34,000 levels, DOGE made its way into the top 10 and a number of altcoins saw bullish breakouts.

XRP and Stellar (XLM) are both up around 9% in the past 24 hours, while Voyager Token (VGX) has continued to climb, currently up 70% and trading at $ 1.77.

BTC / USD daily chart. Source: Coin360

The market capitalization for cryptocurrencies is now $ 1.01 trillion, and the dominance rate of Bitcoin is 63.5%.