Economist John Bollinger has joined rising speculation that a sizable event is due in Chinese Bitcoin activity — but what kind?
Bollinger: Time to ‘Pay Attention’ to Bitcoin/Yuan
In a tweet Thursday, the father of the Bollinger Band stated “the time is near to pay attention” to the CNY/BTC pair, but that “the length of the squeeze suggests a trade rather than a trend.”
— John Bollinger (@bbands) October 6, 2016
Bitcoin.com last week reported on the increasing attention on bitcoin as a tool for capital flight from China, Here, investors are increasingly able to circumvent capital controls.
Bollinger did not stress that particular result is certain, but rather a shift in the status quo. In responses to his original statement, he reiterated that the longer the ‘squeeze’ continues — the period during which positions are sold en masse — the “less likely” we’ll witness a long-term trend.
He added that he “uses mostly daily and weekly Bollinger Bands” to make predictions.
Pale Yuan Fuels Multi-Angle Bitcoin Optimism
The yuan is experiencing mixed fortunes in 2016. Despite the IMF adding it to its reserve currency basket only last month — only the fifth to make the grade — its value has depreciated by more than 7% since January.
A regular media cliche is that drops in CNY fuel interest in ‘back-door’ investment opportunities such as Bitcoin. However more and more commentators appear to give weight to the concept.
The numbers meanwhile speak for themselves: Quartz notes that over 94% of Bitcoin trading was done against CNY in August, whereas in August 2015 it was 60%.
“Chinese people are known for their love of gambling,” HaoBTC CMO Eric Mu told the publication. “Bitcoin fluctuates wildly. It’s easy for you to make money, and also to lose money.”
Bitcoin’s steady stabilizing versus the Yuan’s steady decline could thus be providing the perfect storm for individual investors.
Not just investors, but predictably the Bitcoin business sector is relentlessly upbeat about the Chinese market. The country’s vast mining operations, for instance, have recently become more outward-facing and created an enhanced presence in Tibet.
At a Shanghai fintech forum last month, Bitmain CEO Jihan Wu described China’s existing Bitcoin infrastructure as “excellent.”
“In issuing Bitcoin, the earliest dedicated chips for Bitcoin in the world were manufactured and produced in China,” he said.
“In the trading aspect of blockchain, the technology and trading volume of Chinese exchanges are also excellent.”
What do you think about John Bollinger’s theory? Let us know in the comments section below.
Images courtesy of Shutterstock.
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