In December 2017, the price of Bitcoin hit a 10-year high, and subsequently, it began a wide range of shocks for nearly three years. At the beginning of 2020, when the public was looking forward to the third Bitcoin halving, the “312 plunge” occurred.
Today, as Bitcoin breaks through the $20,000 mark, the market is no longer as hot as 2017’s record high. Most domestic investors have lost their bargaining chips, while institutional investors outside the sea are using real money in their hands to buy Bitcoin.
Previously, most investors in the industry had a view that for most Bitcoin holders, when they needed to spend in legal currency, they would choose to sell Bitcoin in exchange for cash. When a large number of holders need cash at the same time, they may choose to sell Bitcoin, which will cause the price of Bitcoin to fall. This is the logic that Bitcoin will fall during Christmas and Spring Festival.
But will Christmas really plummet? Rhythm BlockBeats This article will tell you some objective facts from several aspects.
In the past six years of Bitcoin, the probability of Christmas falling is 83.3%
Rhythm BlockBeats produced the Bitcoin quotations for Christmas from 2014 to 2019, and found that Bitcoin has fallen during Christmas in the six years except 2015, with drops of -0.99%, -0.22%, -1.74%, -6.34%, -0.77%, the increase of Bitcoin in 2015 was 0.11%.
However, if you look at the trend of the seven days after Christmas, the probability of Bitcoin rising and falling is 50%. The highest rise is 13.69% in 2016 and the highest fall is 4.82% in 2015.
At the same time, there is no strong correlation between the Bitcoin Christmas market and the overall trend in December.
Institutions are on holiday, Ripple is sued or potentially bad
Institutions such as Grayscale and MicroStrategy began to increase their holdings, attracting a large number of investors to follow and imitate. Prior to this, ARKW, a fund of Ark Investment, sold 141,000 GBTC on November 25 and 575,000 GBTC on November 30, for a total of 716,000 GBTC. Coincidentally, on the day after ARKW sold GBTC, the price of BTC dropped. On November 26, the price of BTC dropped by 8.39%. On December 1, the price of Bitcoin dropped by 4.73%.
Of course, it is difficult to attribute the cause of Bitcoin’s plunge to ARKW’s sale of GBTC, but the impact of institutions on Bitcoin deserves our attention.
Some investors often worry that the absence of compliance agencies on weekends and holidays and the suspension of trading on compliance platforms (there is a closing on traditional platforms) will cause the price of Bitcoin to fall. Rhythm BlockBeats checked the weekends of the last six weeks and found that the weekends are not fixed law.
For compliance agencies, the most feared is legal risk. Recently, the US Securities and Exchange Commission has filed a lawsuit against Ripple and its CEO and co-founders. Will the compliant trading platform choose to delist XRP and become the sword of Damocles hanging over XRP holders? Of course, once the supervision is strengthened, some compliance agencies may choose to sell the cryptocurrency they hold, which will increase the selling pressure on the market or become a potential negative for Bitcoin.
On December 24, Adam Cochran, partner of Cinneamhain Venutres, stated that Coinbase may delist XRP on December 25, and December 25 coincides with Christmas, so beware of market risks.
Huge options are about to be delivered
This Christmas coincides with Friday, and it is on the delivery date of quarterly contracts and options. According to skew data, bitcoin options worth US$2.347 billion (approximately 102,200) will expire on December 25, and the “biggest pain point” of bitcoin options for delivery this time is at US$18,000.
In traditional markets, the sellers of options are generally institutions, and the buyers of options are generally retail investors. The biggest pain point of options is the exercise price that has the largest institutional profit and the smallest retail profit. Therefore, traditional market assets have a tendency to move to the price of the biggest pain point before the option expires. Currently, the biggest pain point of Bitcoin options for Christmas delivery is $18,000.
In addition to options, there are a large number of quarterly contracts to be delivered. According to the statistics of Rhythm BlockBeats, contracts worth more than $1.2 billion will be delivered on December 25. When the contract position is too large, investors need to be careful of skyrocketing and falling.
