Bitcoin price starts 2022 at $ 47,200, and new research attributes performance to exodus of traders from China
Exchanges deactivating Chinese citizens before the December 31 deadline may have increased the pressure to sell Bitcoin.
Bitcoin ( BTC ) bears lost in the last minute as 2021 came to a close, and consensus is growing around China being the reason for the decline again .
China’s «last hammer» could now provide BTC with optimism
Hours before the annual close, the BTC / USD pair plunged $ 2,000 to lows of $ 45,630 on Bitstamp before a modest rally closed to 2021 at $ 47,200, data from Cointelegraph Markets Pro and TradingView show .
Although this is something of an anticlimax and well below many popular projections, the lack of a parabolic rally in the price of Bitcoin has recently turned explanations to exchanges .
Chinese users , after years in which the government has tightened the nuts on cryptocurrency trading, had until December 31 to leave the main Chinese exchanges, which were forced to remove them .
For Bobby Lee, former CEO of the BTCC exchange, this constitutes the «last hammer» in Beijing’s arsenal and it could have had a considerable impact on sales performance .
«Maybe that’s why the long-awaited year-end bull market hasn’t taken off yet,» he argued in a series of tweets on the matter in early December.
«Waiting for the last hammer to fall in China! Expect a mini-correction when the news on the new laws comes out, and then a relief rally that could return us to a true Bitcoin bull market.»
Other views supported the theory , while this week, Blockstream also acknowledged possible liquidation pressure from Chinese users, who could be selling their BTC to withdraw capital, leading to rising balances .
It is also a possible cause for optimism going forward, as the Chinese trade glut will be cleared from the end of this month .
«I think this probably explains why we have seen Bitcoin price typically trade weaker during Asian hours versus US and European hours,» wrote Blockstream analyst Jesse Knutson in the latest weekly newsletter from the firm.
«It is also a potential reason for optimism going forward, as the Chinese trade glut will be cleared from the end of this month.»
Staying calm in the face of holiday volatility
In shorter time frames, tight holiday liquidity could provide another reason to rule out price drops like the one seen on Friday .
Before the return of Wall Street and institutional traders, Bitcoin’s price action in general can provide an unreliable impression of how the market will behave subsequently .
I am not very confident in the direction of this movement. I don’t think it is (currently) as clear as the end of July (bullish contraction setup) for example. I just know that it will come.
That is why I have been advocating to be clear about the points of invalidation. The $ 53,000 was used to not buy at the end of Monday.
In 2022, according to a forecast this week, there should be a major «shift» in Bitcoin ownership in favor of high-volume institutional traders and retail holdings reduced.