Bitcoin starts in 2022 at $ 47.2,000 as new research confirms the performance of the exodus of traders in China
Bitcoin (BTC) lost at the last minute at the end of 2021 – and consensus is building around China which is again the cause of the weakness.
China’s ‘last hammer’ could now give BTC optimism
Hours before the annual close, BTC / USD plunged $ 2,000 to $ 45,630 on Bitstamp before a modest rally pulled a line below 2021 at $ 47,200, according to data from Cointelegraph Markets Pro and TradingView.
While something anticlimax and well below many popular projections, the lack of parabolic upside for Bitcoin has recently seen the explanations shift to trading.
Chinese users, after years of the government tightening the screws around crypto trading, had until December 31 to exit major Chinese exchanges, which were forced to deregister them.
For Bobby Lee, former CEO of the BTCC stock exchange, this constitutes the “last hammer” in Beijing’s arsenal and which could have had a considerable impact on sales behavior.
“Perhaps this is why the long-awaited end-of-year bull market has not yet taken off,” he argued in a series of tweets on the subject in early December.
“Until the last hammer falls in China!” Expect a mini-correction when news on the app releases, and then a rally of relief that could put us back on track for a true Bitcoin bull market. “
Other voices supported the theory, while this week Blockstream also acknowledged the possible pressure of offloading Chinese users, who could sell their BTC in order to withdraw capital, resulting in increased balances.
This is also a potential reason for optimism for the future as the Chinese foreign exchange surplus will be wiped out from the end of this month.
“I think this probably explains why we have seen Bitcoin generally trade weaker during Asian hours compared to US and European hours,” Blockstream analyst Jesse Knutson wrote in the latest weekly newsletter of the company.
“This is also a potential reason for optimism for the future, as the Chinese foreign exchange surplus will be absorbed from the end of this month.”
Stay cool on the volatility of the holidays
Over shorter time frames, low holiday liquidity could provide another reason to rule out price cuts like the one seen on Friday.
Related: America’s First Bitcoin ETF ‘Missed’ In 2021 As GBTC Discount Stays Near Record Lows
Ahead of the return of Wall Street and institutional traders, the overall BTC price action can give an unreliable impression of how the market will perform next.
I am not very confident in the direction of this color. Don’t think it’s (currently) as clear as end of July (short compression setup) eg. Just know it will come.
This is why I advocated having clear invalidation points. $ 53,000 served well by not buying the high Monday.
– Will Clemente (@WClementeIII) December 31, 2021
2022, according to a forecast this week, is expected to see a significant “turnaround” in Bitcoin ownership in favor of high-volume institutional traders away from retail.