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Bitcoin starts 2022 at $47.2K as fresh research pins performance on China trader exodus

Bitcoin (BTC) bears lost out at the last minute as 2021 came to an end — and the consensus is building around China again being the reason for weakness.

China “last hammer” could now provide optimism on BTC

Hours before the yearly close, BTC/USD dived $2,000 to lows of $45,630 on Bitstamp before a modest recovery drew a line under 2021 at $47,200, data from Cointelegraph Markets Pro and TradingView shows.While something of an anti-climax and far below many popular projections, the lack of parabolic upside for Bitcoin has recently seen explanations shift to exchanges.Chinese users, following years of the government tightening the screws around crypto trading, had until Dec. 31 to leave the major Chinese exchanges, which were obliged to unregister them.For Bobby Lee, former CEO of exchange BTCC, this constitutes the “last hammer” in Beijing’s arsenal and one that could have been having a considerable impact on selling behavior.“Maybe that’s why the hotly anticipated year end bull market hasn’t taken off yet,” he argued in a series of tweets on the matter in early December. Other voices supported the theory, while this week, Blockstream also acknowledged the possible pressure from offloading Chinese users, who could be selling their BTC in order to withdraw capital — leading to rising balance.It’s also a potential reason for optimism going forward as the Chinese exchange overhang will be cleared from the end of this month.“I think this probably explains why we’ve seen Bitcoin typically trade weaker over Asia hours vs US and European hours,” Blockstream analyst Jesse Knutson wrote in the firm’s latest weekly newsletter.

Staying cool on holiday volatility

On shorter timeframes, thin holiday liquidity could provide another reason to discard price dips like the one seen Friday.Related: First US Bitcoin ETF a ‘dud’ in 2021 as GBTC discount stays near record lowsPrior to the return of Wall Street and institutional traders, BTC price action overall may provide an unreliable impression of how the market will perform subsequently.I’m not very confident in the direction of this flush. Don’t think it’s (currently) as clear as late July (short squeeze setup) for ex. Just know it will come.

This is why I’ve been advocating to have clear invalidation points. $53K served well in not buying the top on Monday.2022, one forecast this week said, should see a major “flippening” of Bitcoin ownership in favor of large-volume institutional traders and away from retail.

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