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While the largest cryptocurrency Bitcoin (BTC) continues to navigate around $43,000, East Asian countries are going through the last working days before the Lunar New Year holiday, according to the Chinese calendar. On February 10th, East Asia will welcome the Year of the Dragon, considered one of the luckiest and most prosperous animals in the Chinese Zodiac.
Potential Ignition for a Rise in Bitcoin and the Overall Crypto Market
Hong Kong-based brokerage firm CLSA had predicted in a note published last January that the Year of the Rabbit would bring a calm demeanor and advised investors to cautiously step out of their comfort zones, suggesting that 2023 would be a year of high volatility in the markets. Indeed, the cryptocurrency market has emerged from the crisis period of 2022, with the largest cryptocurrency BTC rising by 94% and the largest altcoin Ethereum (ETH) by 47% over the year.
The largest altcoin, despite not performing as expected throughout 2023, Taiko’s co-founder and CEO Daniel Wang stated, “In this auspicious year full of positive energy, ETH has the potential to perform well. In an interview with CoinDesk, Wang mentioned that the Year of the Dragon will open new opportunities for Ethereum, especially with the anticipated effect of spot ETFs. Ethereum is making progress towards lower transaction fees and faster transactions with the long-awaited Dencun update,” he said.
Senior Analyst at Metalpha Lucy Hu highlighted a promising outlook for Bitcoin, considering the upcoming halving of block rewards and inflation being brought under control, stating, “Although the crypto market is currently under a ‘sell the news‘ effect, the Year of the Dragon is expected to be a year where inflation is managed and investor confidence increases with Bitcoin’s block reward halving later this year. We hope the fiery spirit of the Dragon will take the market to an unprecedented peak,” she said.
Recovery Also Expected in Traditional Markets
In its latest report, CLSA also evaluated the traditional market side. While predicting that the Chinese stock market would revive in the second half of the year, it emphasized that sharp price movements are expected.
CLSA analysts noted, “Markets riding on the back of the dragon does not indicate a smooth trajectory. Roller coasters are nailed to the ground, but not the Dragon.” They emphasized that the markets would experience significant volatility and also reminded investors to seek professional advice rather than rely on the stars before investing.
