Bitcoin Rally Driven By Eager Chinese Buyers, Key Data Shows

Tony "The Bull" Severino

5 years ago

2 mins read

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New data based on the delta between Chinese buyers and derivatives markets in Bitcoin markets suggests that much of the recent rally has been driven by crypto investors in China.

But why are Chinese buyers dominating Bitcoin interest, and what is sparking the unusual phenomenon?

Indicator Shows Chinese Buyers Are Dominating Derivatives

Bitcoin price may be falling currently, but it has spent the last two months making a sharp recovery after the Black Thursday 2020 selloff fueled by the coronavirus.

After that now dread worthy day, a massive surge in Chinese buyers can be seen, according to an indicator a well-known Bitcoin researcher has shared via Twitter.

That same indicator is now showing yet another surge of buying interest from Chinese crypto investors suggesting that they are ferociously buying the dip.

The analyst makes no assertions about what this may mean, and just presents the cold, hard, facts about the data, leaving the speculation up to the rest of the crypto space.

https://twitter.com/truenomic/status/1263434260452651008

But Why Is Bitcoin FOMO Happening in China?

As to why this may be occurring, it could come down to a variety of reasons.

China’s President Xi Jinping urged his country to remain on the forefront of the blockchain technology back in October 2019, resulting in a record-breaking rally.

The lingering impact of those comments could be adding to the growing interest from Chinese buyers.

It also could be due to China rolling out its own digital currency soon, so citizens in the country are getting themselves more familiar with digital currency technology.

Far more likely yet, is due to increased trade tensions between the US and China, and the fact that the Chinese economy is hurting after the havoc the pandemic has wreaked on the manufacturing industry there.

Chinese crypto investors may be preparing for the eventual devaluation of the Yuan, coinciding with the rollout of a digital version of the native fiat currency.

The same thing is expected for the dollar, as the US battles the fallout from the pandemic also. Bitcoin‘s deflationary design an scarce supply makes it an ideal hedge against going inflation.

Even hedge fund manager Paul Tudor Jones has been buying Bitcoin for that very reason. Why wouldn’t Chinese buyers be doing the same?

Whatever the reason, Chinese buyers have bought the dip in Bitcoin and keep buying it, which could make one of the next few dips the very last.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
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In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.