Will the Lunar Latest Year Crypto Dip Repeat in 2026? Experts Weigh In
Bitcoin briefly recovered to $70,000 before falling back to the $68,000 range, focusing market attention on potential price volatility around the Lunar New Year. Given the recurring pattern of pre-holiday sell-offs followed by post-holiday rebounds, observers are questioning whether the so-called “holiday formula” will materialize again this year.
The Recurring Lunar New Year Pattern
As of 5:30 AM on February 16th, Bitcoin’s price was approximately $68,395.42, a roughly 2% decrease from the previous day. This followed a brief surge past $70,000. The market is closely watching for typical seasonal trends.
The Lunar New Year often sees a trend of investors converting cryptocurrency holdings to cash to cover holiday expenses like family gatherings and gift-giving. The influence of Chinese investors is also a key variable. Historically, trading activity from Chinese investors and market makers has slowed during the Lunar New Year, leading to temporary declines in global trading volume. Reduced liquidity can amplify price swings, making the period before and after the holiday prone to increased short-term volatility.
Historical Precedent: 2024 and 2025
Past performance suggests a pattern of pre-holiday price adjustments followed by post-holiday rebounds. In 2024, Bitcoin rose to $48,494 on January 11th before falling to $38,678 by January 23rd. It then rebounded during the holiday period, reaching $56,650 by February 27th – a roughly 33% increase compared to February 6th. A similar trend was observed last year, with Bitcoin recovering after initially dipping during the holiday.
Analysis of data from 2015 to 2023 by 10x Research indicates an average profit of 11% for those who purchased Bitcoin three days before the Lunar New Year and sold ten days after.
Expert Outlook: Support at $60,000
Analysts are leaning towards the possibility of a future price rebound. Yurien Timmer, Head of Fidelity Digital Assets, noted that Bitcoin has reached a support level of $60,000 and could potentially retest its all-time high after a period of consolidation.
Investor Sentiment: A Key Variable
However, the overall market sentiment remains subdued. Investor confidence in cryptocurrency has not fully recovered since the large-scale liquidations of late 2023. The Crypto Fear & Greed Index remains in “extreme fear” territory, a level not seen since the FTX bankruptcy in 2022. As of February 16th, the index registered a score of 13, up slightly from 11 the previous day.
Danny Nelson, a Bitwise Research analyst, attributes the current market dynamics to “fear,” stating that investors are driven by the expectation of further price declines.
Frequently Asked Questions
- What is the “holiday formula” in crypto trading? The “holiday formula” refers to the observed pattern of Bitcoin prices declining before the Lunar New Year and rebounding afterward.
- Why does the Lunar New Year impact Bitcoin prices? The Lunar New Year often leads to increased cash needs for holiday spending and reduced trading activity from Chinese investors.
- Is $60,000 a crucial support level for Bitcoin? According to analysts, $60,000 is a key support level that Bitcoin has recently reached, potentially paving the way for a future rebound.
- What is the Crypto Fear & Greed Index? It’s an indicator of market sentiment, currently showing “extreme fear,” which could influence price movements.
Pro Tip: Remember that past performance is not indicative of future results. Market conditions can change rapidly, and it’s crucial to conduct thorough research before making any investment decisions.
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