After a one-week hiatus during the Lunar New Year, cryptocurrencies and Chinese stocks saw a dip in their bull market performance, leading to profit-taking speculation.
The CSI 300 index, which tracks China’s largest listed stocks on mainland exchanges, rose initially but failed to maintain its momentum, ending the day just half a percent higher.
Chinese stock performance after Lunar New Year
Many analysts believe this slight pullback is a healthy break after three months of gains, with the CSI 300 up 19.88% from its October 2022 low. However, there are still negative factors, including the Biden administration’s technology war against Beijing, Covid infections, a broad economic slowdown and the housing crisis.
In the US, Chinese stocks also fell in pre-market trading, with the KraneShares CSI China Internet ETF down 4%.
The latest Bank of America survey found that long Chinese stocks made the list of most heavily traded stocks this month, indicating that investors may be taking profits after a long period of gains.
Cryptos are also taking a hit
The crypto market also saw a slight decline, with Bitcoin and other cryptocurrencies paring gains after rallying over the weekend. The price of Bitcoin fell less than 1% in the last 24 hours to $23,250, after approaching $24,000 over the weekend as Chinese traders returned to their desks.
The reactions of the crypto market after the end of the Chinese New Year have been different throughout history. Some years saw an increase in cryptocurrency prices, while others saw a fall.
For example, in 2018, cryptocurrencies, including Bitcoin, saw their prices drop after the Chinese New Year ended, due to increased regulatory scrutiny from the Chinese government. However, in 2019, the prices of cryptocurrencies, including Bitcoin, rose after the end of the Chinese New Year, as investors saw an opportunity to invest in cryptocurrencies during a period of market volatility.
It is important to note that the crypto market is highly volatile and can be affected by various factors, including regulatory developments, economic conditions and investor sentiment. As a result, it is difficult to predict how the crypto market will react after the Chinese New Year is over.
While the decline in Chinese stocks and crypto markets may seem worrisome, it can also be seen as a necessary pause after months of gains and a sign of profit-taking by investors. Nonetheless, the market will continue to closely monitor the impact of negative factors such as the Biden administration’s technology war and Covid infections.
BeInCrypto has reached out to the company or individual involved in the story to get an official statement on the recent events, but has yet to hear back.