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Bitcoin's "sell the news" type of move is officially over, with the world's pre-eminent cryptocurrency managing to recoup all of the losses incurred in the aftermath of the launch of some of the first spot Bitcoin ETFs in the US. As animal spirits return, investors are now turning their attention toward upcoming bullish catalysts, including an event that does not have much relevance for the Western world but one that has exercised substantial influence over Bitcoin in the past nine years.
Matrixport's head of research and the founder of 10x Research, Markus Thielen, has identified a unique phenomenon over the past nine years, where Bitcoin inexplicably begins to rally three days before the Chinese New Year and continues to do so for a further ten days after the renewal of the Chinese calendar:
"Bitcoin tends to increase by +11% from three days before Chinese New Year (therefore, the rally should start on Wednesday, February 7, approximately Bitcoin @ 43,000) and last until early next week."
Of course, this strategy has received quite a lot of attention this year, which should dilute much of its alpha-generating potential. Nonetheless, it would be interesting to see if the Chinese Dragon manages to roar again.
Bear in mind that 10x research also expects Bitcoin to hit the $52,000 price level in February 2024, which would constitute a new cycle high.
As we noted in a recent post, much of the recent weakness around Bitcoin could be pegged on FTX's estate, which essentially reduced the defunct crypto exchange's sizable Bitcoin stash locked within Grayscale's Bitcoin Trust (GBTC) ETF to zero in recent days.
Bitcoin ETFs absorbed more Bitcoin in less than a month than Microstrategy since it started buying.
Think about it 1, 3, 5 and 10 years out. Bitcoins sold to ETFs may not be available for sale anytime soon. ETFs tend to be long term holdings. https://t.co/6MjVvn6kWG
— Gabor Gurbacs (@gaborgurbacs) February 11, 2024
With the persistent selling pressure from FTX tapering off in recent days, spot Bitcoin ETFs' soaring inflows are now acting as a critical bulwark for the world's pre-eminent cryptocurrency. These ETFs have now recorded cumulative net inflows of $2.23 billion. Last week alone, spot Bitcoin ETFs attracted $1.1 billion in net inflows.
❖ Prepare for a Bitcoin FOMO rally to record highs: Bernstein
On Friday, Bitcoin crossed the $48,000 mark, registering a 13% increase over the past week and edging closer to the key $50,000 resistance level.
Despite a significant upturn in 2023, with a 160% increase, and…
— *Walter Bloomberg (@DeItaone) February 12, 2024
According to Bernstein analysts, "Bitcoin's best days are yet to happen as the ETF-driven market fuels fears of missing out (FOMO)."
With much of the recent overhang removed, crypto enthusiasts can now prepare for the upward thrust that is likely to materialize in the run-up to the next halving event in April 2024, when the reward for mining Bitcoin will again be cut in half in what is a regular 4-year cycle, unleashing a potent deflationary wave in the process.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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