Traders Discuss Overheated Stats and a Possible Chinese New Year Dump as Bitcoin Taps $48K

Why Tesla? 

After Tesla informed the public that it added $1.5 billion to the company’s balance sheet the price of bitcoin soared to new heights. It has retreated in value a hair since then as Bitcoin touched an all-time high reaching $48,216 per unit. Bitcoin prices may see a drop as we cross over into the Chinese New Year while crypto enthusiasts are bullish, a few supporters and analysts believe the crypto asset might be overbought. 

Continuing To Swell Is The Crypto Economy’s Trillion-Dollar Market Cap 

As the cryptocurrency touched an ATH at $48,216 per coin, bitcoin has seen significant gains during the last 24 hours. The crypto asset is exchanging hands for prices between $46,500 to $47,100 per unit with $39 billion in global trade volume during the last hour. 

BTC has a dominance rating of 62.9% today out of the $1.32 trillion market cap amongst all 8,416 cryptocurrencies and 33,534 markets. As of now, it is observed that bitcoin thereby gained 27% this week, then 18% during the last month as well as 188% for the 90 days, and finally 360% against the USD for 12 months. Yesterday was the largest daily candle in history as ten years ago today, the price of bitcoin reached $1. 

It was shown that Ethereum tapped the $1,800 range at 4:02 a.m. (EST) on Tuesday. Capturing roughly $13.2 billion in global trade volume currently, ETH is swapping for $1,748 per unit. 

After the two currencies have been battling for the fourth largest market cap, Polkadot is trading for $22.99 per coin and has displaced Cardano. At the time of publication with $21 billion worth of volume, Cardano is swapping for $0.68. 

Ethereum Onchain Transfers Top Bitcoin’s Transfer Value As Coin Metrics’ State of the Network

Explaining on Tuesday that the top two leading crypto assets (ETH & BTC), have seen increased onchain metrics, was the Coin Metrics team and analyst Nate Maddrey. 

Maddrey detailed in the firm’s 89th newsletter that across the board this past week, BTC and ETH onchain metrics were in the green. Adding to this Maddrey said, while the ETH market cap grew by 19.6%, the BTC market cap grew by 12.9% week-over-week. As both continue to set new all-time highs, BTC and ETH realised cap also grew by 3.3% and 12.8% respectively. 

Continuing on it the Coin Metrics analyst said, 

Topping BTC’s onchain transfer value was ETH’s. Its highest level ever, ETH’s adjusted transfer value reached over $19B on February 4th. 

Tesla Moved the Needle

Those people should expect a giant shift into the crypto economy following Tesla’s recent purchase was the cryptocurrency analyst Simon Peters explaining on Tuesday. Peters then said, moving the needle was yesterday’s move by Tesla to invest in bitcoin and start accepting it as payment for its own products. 

The Etoro analyst then added, linking it to their own payment systems there was already talk of copycat moves from Apple and Google. Coming to be growing is the shift to digital consumption. With bitcoin payments increasingly making sense for businesses that conduct nearly all their sales online we expect to see others follow in Tesla’s footsteps. 

Is Bitcoin Overheated? Technical Indicators Say Yes

Analysts and crypto supporters are questioning whether or not bitcoin is overheating at this point on Twitter. Is bitcoin severely overbought is what Linas Beliunas asked his Twitter followers. He added that these indicators suggest it is. Showing a number of technical indicators Beliunas shared an image stemming from the data site Marketmilk. 

That indicators like Bollinger Bands, Relative Strength Index, Stochastic Oscillator, and other signals suggest BTC is overbought as Marketmilk stats show. 

As the summary says BTC is a buy, moving averages point to a strong buy and oscillators are reading neutral is however trading view’s network summary of technicals which is different. 

The Chinese New Year Transition

As value drops have traditionally been consistent during every Chinese New Year transition, some crypto enthusiasts think there’s a great possibility of a Chinese New Year dip ahead of bitcoin. The cryptocurrency supporter Tyler Reynolds told his 17,000 followers that a correction may happen soon on February 5, 2021. 

Called the “‘Chinese New Year Effect’ in BTC Market,” on February 1. 2019 Phoon Mei Hui published a report. That the Chinese New Year dump may not be a reality as however, the author says. Mei Hui wrote at the time that between the BTC price movement and trading activities during Chinese New Year, they have seen some potentially interesting relationships though not proven casual. She then added, are the signs coming to be compelling, or maybe not. 

Reynolds then tweeted, defi just broke its parabola and they will drop at least 40% from these levels if he had to guess. He would expect a fairly sharp pick up if it did break as ETH and BTC won’t drop 40%. 

Winding Up The Discussion 

Coingecko founder Bobby Ong wrote to his Twitter followers this week that to buy this upcoming dip which he also believes is overdue, he has his guns loaded. He then goes on that he is all ready for the Chinese New Year dip. It has been set for buy orders at 30% from ATH. This weekend let's see if a correction comes. 

This year is the “Year of the Ox” or Metal Bull as last year’s Chinese New Year was the “Year of the Rat.” It may not however come to fruition due to this pattern has been consistent over the last few years. There’s a lot of sell-off before January 1 because of tax implications for instance traditionally during the end of the year in the US. Continuing to jump forward into 2021 instead cryptocurrencies like BTC and ETH touched new all-time price highs.