Chinese New Year could drive Bitcoin selling pressure

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The upcoming Chinese New Year holidays on Feb. 12 could have an indirect impact on the Bitcoin (BTC) price and drive sell-offs on the market, according to a recent analysis. 

Per a Jan. 28 report by cryptocurrency investment firm Stack Funds, the ongoing selling pressure on the Bitcoin price is likely to continue in the short term due to Asian miners increasingly offloading their funds amid the upcoming week-long holiday.

With more than 60% of global Bitcoin mining pools are located in China, Stack Funds head of research Lennard Neo suggested that a lot of selling pressure is coming from Chinese miners. The researcher stated that the Miner Position Index, or MPI, has seen a massive surge recently, indicating a subsequent pullback of Bitcoin price. As Cointelegraph reported, MPI surged to its highest levels since 2019 in mid-January 2021.

Neo concluded that the ongoing sell-off coincides with the upcoming holidays, suggesting that the floor price is yet to be seen:

“With upcoming Chinese New Year holidays, we expect this selling pressure to continue in the short-term, providing good entry opportunities for market participants […] We also expect this volatility to persist in the coming weeks, adding pressure to further corrections for Bitcoin prices.”

Also known as the Lunar New Year or Spring Festival, Chinese New Year is one of the biggest holidays celebrated in the country and is usually associated with increased spending. 

As previously reported, the crypto community has long speculated that Chinese New Year celebrations have historically driven Bitcoin price declines. 

At publishing time, Bitcoin is trading at $31,546, up 2.8% over the past 24 hours. After briefly dipping below $30,000 on Jan. 27, BTC is down 4.3% over the past seven days.