A Retrospective Study of Cryptomarkets Linked to Chinese New Year

Alright lets get started with our retrospective analysis, I am sure most individuals relatively new to the Cryptospace are worried about the recent drop in the markets, I am writing this article to point out the light at the end of the tunnel.

There does appear to be a correlation to Chinese New years traditional Bonus payouts and a Boom in market capitalization. One must take note that the Chinese New years is one of the largest mass migrations of people in the world (this costs those people money), in addition to that is that it is customary to gifts friends and family with a red envelope filled with money as a signal that you wish for their future (the receivers) success in the new LUNAR year. The third factor that pulls monetary resources from individuals during the commencement of Chinese New Year celebrations is Bonuses that have to be paid for workers, it is very likely that small business owners may invest working capital in cryptocurrency and a portion of the gains are distributed to the workers the business owners want to keep happy and thus ensure they will come back after Chinese New year; it is not uncommon for employees not to come back if a bonus paid is too small, this can either be deemed insufficient directly by the employee or his/her family members (bonus's are discussed at the family dinner table). It is important to note that this "sell-off" initially stemming from Asia initiates a lot of individuals to sell their holdings as they fear the market is crashing for reasons associated to FUD; this is made worse by the fact that A LOT of new investors have joined the cryptocurrency markets who are not used to massive dips plus the last 2 months have had a very large amount of bad media publicity aimed at the crypto-markets.

If you go back and analyze trends of overall market capitalization you may discover a overtly direct correlation of when bonus's are paid out to workers in China and most of Asia and a steep increase in market capitalization that follows (i.e this will result in a large increase of value in majority of coins held in someones crypto-portfolio).

Lets note that in China a bonus can be equivalent to a 13th and even 13+14th check (some firms paying up to a 15th check!). "In many parts of China, it is customary to pay the salary on a 13-month basis, with the final month paid just prior to the Chinese New Year. Though this is optional – and would be laid out in the employment contract – many employees simply expect this as a ‘New Year’s Bonus,’ so a failure to include it in the organizational compensation plans may cause problems in the labor force. Some companies also provide 14th- and 15th-month bonuses, adjusted according to performance reviews." (https://www.cloudpay.net/resources/understanding-payroll-in-china-what-global-companies-need-to-know-about-china-payroll)

Lets have a look at the data starting in 2017
First lets note what day Chinese New Year fell in 2017:

So we agree that in the East a fair amount of people are expecting some hefty payouts very soon. Lets see what happened a few days after people received their hefty payouts on the 28 January 2017. But let us consider payment would have likely reflected on the 30th of January as the 28th fell on a Saturday.

Market Analysis for 2016

Now let us investigate if this phenomenon occurred in 2016. First lets note what day the Chinese New year fell or rather around what time bonus' were likely paid out in mass to workers:

Baring that date in mind lets have a look at the relevant graphs:

CONCLUSION

This "dip recovery trend" appears completely normal. Therefore what day is likely the predicted 'BOOM" day that will make all of us Crypto-Investors feel at ease again:

Have a look --> https://en.wikipedia.org/wiki/Chinese_New_Year

Personally I am going to relax and buy coins on their respective "dips". This article and all my articles are NOT financial advice. This is merely my opinion and me pointing out potential trends that may or may not hold direct correlations to mass societal behaviors.