Yololintian
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March 04, 2014, 10:42:31 PM

China didn't have anything to do with the downtrend in February, and there is no reason to suppose demand in China is decreasing. The biggest issue with China recently was the uncertainty of what would happen on January 31st (which amounted to nothing); and all we did in January was fluctuate around $800 while worrying about the possibility of something on the 31st. February's downtrend was caused by uncertainty in mtgox and other exchanges, lies about the extent of transaction malleability, some finally mtgox's insolvency. Those issues have mostly been resolved at this point.

Then how comes the price remained stable throughout the Chinese New Year's holiday week (from ~Jan/29 to ~Feb/05), when volume was very low at the Chinese exchanges; and started to decrease, with increased volume. as soon as the holiday ended and banks opened?

The MtGOX withdrawal problems did not seem to have any effect on China, which is understandable since MtGOX is as relevant to Chinese investors as BTC0China is to western ones.  On the other hand, the announcement on Feb/10 of a "bug in bitcoin" did shake all markets, including China.

I think its simply because the events that caused the downtrend began on feb 5th. The first event was the glitch on bitfinex that allowed people to trade with absurd leverage, which caused some FUD and caused a dip to 685 on bitfinex on feb 5th/6th. One or two days later, the exchanges were being ddosed and the malleability issue was brought to light. Of course, this caused higher volume and selling pressure - lower prices on all exchanges including the Chinese ones. Interestingly enough, China reacted less than the other exchanges in terms of magnitude of price decrease during most of these events. I think that suggests they weren't as concerned, and might have gotten the information slower in most cases.