This Bitcoin Chinese New Year trade has been a winner for the past 8 years. – Rayrice Forex News

This Bitcoin Chinese New Year trade has been a winner for the past 8 years.

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Bitcoin extended gains over the weekend ahead of the Lunar New Year holiday and the Spring Festival in Southeast Asia.

The major cryptocurrency surged above $23,000 on Saturday, gaining nearly 10% from the previous day, according to CoinMarketCap data. The coin hit a local high of $23,282, a level not seen in more than five months. As of now, Bitcoin is trading around $22,900, which is flat on the previous day.

Ethereum, the second largest cryptocurrency, also recorded significant gains, reaching a high of around $1,674, which has not been seen since September of last year due to its long-awaited integration update. The total market cap has surpassed $1 trillion.

The rally comes as bitcoin historically performs well at the start of the Lunar New Year holiday, often referred to as Chinese New Year, which is celebrated in much of Asia. According to Marcus Thielen, head of research at Matrixport, the Lunar New Year holiday is considered a good entry time for investors. he said:

“Buying Bitcoin at the end of the first day of the Chinese New Year and selling it after 10 trading days returned an average of +9%, showing positive returns over the past eight years (2015-2022). The beginning of the Chinese New Year was an exciting entry time for long positions.”

Bitcoin and Ethereum are up around 38% and 35% year-to-date. While a mix of factors may have affected crypto’s impressive start to the year, the market was buoyed last week after new data released by the US Labor Department confirmed that inflation is slowing.

Annual inflation eased to 6.5% in December, compared to 7.1% in November. Low inflation is often considered bullish for risky assets like crypto, as it puts pressure on the US Federal Reserve to reduce interest rate hikes.

Meanwhile, the crypto bulls expect the crypto market to continue its upward movement, according to Sean Farrell, head of digital asset strategy at Fundstrat, this year Bitcoin will reach between $35,000 and $44,000, and Ethereum between $2,400 and $3,200. But he still warned investors to be wary of near-term risks. he said:

Despite our view of the absolute bottom for the majors, we still believe there are some near-term risks to be aware of. These include further declines from the DCG, one more slide in risk assets at the next FOMC meeting, and despite a recent rally, we are still in the midst of a chain bear market.

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