Asian Investors' Affect on Bitcoin Price Likely Not to Last

Lower bitcoin prices are in part due to remarkable amount of selling from Asia - but will that last?

According to on-chain analytics firm Glassnode, the bitcoin (BTC) price drops considerably more during Asian company hours than it does during European and US business hours, suggesting that strong selling pressure is coming from Asian investors.

The data, which was first tweeted by Glassnode researcher Johannes Hofmann, compared the cost on a given day with the cost a month earlier and examined how big the monthly price variations were at different times of the day.  

According to Hofmann, the data reveals an unprecedented amount of selling from Asia as a force behind the lower bitcoin prices seen since the cryptocurrency had reached an all-time high in early November.

Furthermore, the data reveals that selling pressure has increased during Asian hours in November and December, with a peak negative month-over-month price change of more than USD 20,000 noted as the bitcoin price plummeted to USD 42,000 on December 4.

When compared to European and US business hours, when the monthly price changes were far more varied, the selling pressure from Asia becomes even more apparent.

With so much selling pressure coming from Asia, it's reasonable to assume that some of it is being driven by Mainland Chinese bitcoin investors.

Some Chinese investors may be looking to get rid of their coins ahead of the new year, when more exchanges and peer-to-peer (P2P) markets are expected to shutter, according to recent news.

According to the Blockstream's Samson Mow, this is precisely what is taking place. He also predicted that current selling pressure will subside soon. As Mow tweeted, “Sell pressure from China should ease up after year end.”

Several China-focused centralized exchanges have already closed their doors, urging customers to withdraw funds before service is completely disabled on the Chinese mainland.

With P2P applications, which are one of the final remaining locations for trading between fiat and cryptocurrency in China, said to be closing, Chinese bitcoin users' alternatives are rapidly disappearing.

Meanwhile, the data pointing to an increase in Asian selling pressure arrived as the People's Bank of China (PBoC) – the country's central bank – lowered one of the most significant lending rates.

According to well-known economist Mohamed A. El-Erian, President of Queens' College, Cambridge University, the effect is modest yet the signal is significant since it occurs during a period of less monetary stimulus in developed nations.


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