Did Xi Jinping Impact the Price of Bitcoin?
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BTC sentiment is a key market driver. Following Xi Jingping’s positive comments on blockchain a narrative that the news will drive price growth has emerged. A look at search trends between Bitcoin, gold, and China provides additional insight.
In the October issue of the Bitcoin Monthly Outlook Delphi analysts tried to explain the summer price collapse in BTC by analyzing the change in sentiment toward the coin. They point out that the rally was correlated with the resurgence of the “digital gold” line of thinking. Growth in this particular keyword combination was aided by Grayscale’s “Drop Gold” campaign beginning May.
Delphi follows this trend by using Google searches of “Bitcoin + gold,” which shows a nice rally leading into June followed by a loss of public interest and a subsequent collapse in price.
Taken further, the idea suggests that by following retail interest in a trend that it’s possible to explain and possibly even predict the price movement for BTC.
The most recent such macro trend has been China’s change in its stance on blockchain. The market appeared exuberant after China’s General Secretary Xi Jinping made a positive statement on blockchain — but did the narrative take hold?
Taking a look at Google trends data for “Bitcoin + China,” a spike in searches is observable around Oct. 9 well in advance of the announcement. This coincided with Biance’s announcement of its P2P Trading platform that accepted yuan. Soon thereafter, interest in the China topic appeared to subside. Not only that, the statement from China’s General Secretary did not increase search volume by much.
This suggests that the retail public did not buy into the China narrative. And while crypto insiders hyped up the announcement it seems that new money remained unconvinced. This means that China may not be the catalyst that the market needs for a sustained increase in Bitcoin’s price.