Santa Rally for Bitcoin Price This December? 5 Big BTC Supports

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As a seasoned researcher with a keen eye for market trends and an unwavering interest in the ever-evolving world of cryptocurrencies, I find myself at a particularly exciting juncture this December. With my fingers firmly on the pulse of the market, I can confidently say that this might just be the perfect time to invest in Bitcoin.

Is this December a good time to buy Bitcoin?

Many believe that no present is as valuable as the one given in the present moment, particularly during the festive end-of-year period. This is because stocks and digital currencies, such as cryptocurrencies, traditionally yield a significant portion of their annual profits during this timeframe.

According to Investopedia’s report from last year, a Santa Claus rally refers to a continuous rise in the stock market that typically takes place around the Christmas holiday on December 25th. This increase in the market is often observed during the week leading up to Christmas, though some analysts have also noticed trends starting from Christmas Day and lasting until early January.

However, the increase in Bitcoin and cryptocurrency markets this month isn’t solely due to seasonal fluctuations. Instead, there are significant underlying market trends that favor the “little orange coin.” Additionally, key factors within its supply, both on the blockchain and on exchanges, are also playing a role.

Furthermore, it’s not just a myth, but rather a tangible effect, the “Trump boost” on many stocks and digital assets following his unprecedented election victory is evident. Due to his pro-growth stance towards cryptocurrency, markets anticipate that this favorable view will significantly impact Bitcoin, as his administration takes shape.

Five predictions from Bitcoin enthusiasts suggest that the price of BTC could continue to increase, reaching new highs as we move through December and into the New Year.

1. Fed Expects to Cut Rates Again in Dec

During periods when Federal Reserve interest rates are low, digital currencies such as Bitcoin tend to increase in value over the long term, along with corporate sales, stocks, and other investments. For example, after the financial crisis of ’08, interest rates were held close to zero for several years. This favorable environment allowed Bitcoin to skyrocket from virtually nothing to $20,000 per BTC by December 25, 2017.

Consequently, as the Federal Reserve increased interest rates throughout 2018, the value of Bitcoin plummeted, earning the title “crypto winter” among financial markets.

Subsequently, the Fed lowered interest rates once more in 2020, a move triggered by the global coronavirus pandemic. This action resulted in record-breaking prices for Bitcoin and numerous other cryptocurrencies. However, at the start of 2022, the central bank reversed course and began to increase interest rates again.

As a crypto investor, I’m thrilled to see that the Fed’s decision to lower rates once more has ignited Bitcoin with a surge of optimistic energy. The price is soaring past unprecedented highs set in December and there’s no indication it’s going to slow down anytime soon. The daily trading volume is climbing at an equally rapid pace, mirroring the upward trend in prices.

A significant member of the Federal Reserve indicated in early December that they were prepared to lower interest rates once more during their meeting on the 17th and 18th. In essence, Christopher Waller, one of the Fed’s important figures, expressed his inclination towards approving a reduction in the policy rate at this particular meeting.

2. Bitcoin Supply Cycle In Mid-Swing Straight Up

#Bitcoin Cycles Timeline. I don’t make the rules.

2016-2020
Halving to Peak: 525 days
Peak to Bottom: 364 days
Bottom to Halving 518 days

2020-2024
Halving to Peak: 532 days
Peak to Bottom: 371 days
Bottom to Halving: 532 Days

The next halving date is March 26, 2028. Look how…

— Brett (@brett_eth) December 7, 2024

In simpler terms, the accommodative monetary policy of the Federal Reserve (Fed) could boost Bitcoin’s value, while the supply mechanism of Bitcoin also favors its price increase. Built into the core software that powers Bitcoin is a rule that reduces the creation of new Bitcoins by half every four years.

Translating that into simpler terms: It’s similar to the Federal Reserve increasing interest rates every four years, which makes a dollar worth more in terms of buying power over time. However, the Fed often lowers interest rates instead, making each dollar less valuable. This encourages consumers and businesses to spend money quickly as they can take advantage of lower costs. The idea is that economic growth will eventually balance out this initial weakening of the dollar.

As a crypto investor, I find that Bitcoin is strategically built to enhance the purchasing power of its long-term owners. Instead of flooding the market with new supplies and diluting its value, Bitcoin intentionally slows down the production rate to strengthen and sustain its worth.

3. Nov Blowout in Crypto Exchange BTC Outflows

As an analyst, I’ve noticed that the daily influx of new Bitcoins has been cut in half this year. Simultaneously, the number of BTC tokens available for trading on crypto exchanges has significantly decreased. This reduction in exchange liquidity serves as a robust foundation for Bitcoin’s price stability over the long term.

30-day withdrawals of cryptocurrency from exchanges reached a staggering 58,440 Bitcoin (equivalent to $5.58 billion) on December 3rd, as per CoinGlass data. By December 7th, only four days later, this figure had skyrocketed to an astounding 116,259 Bitcoin.

This shows that long-term investors are confident about Bitcoin and prefer to keep it instead of selling it for cash.

4. The EOY Sales Bump

Many companies achieve their yearly income targets during the last few weeks of the year, from November 1st to New Year’s Eve. This trend holds true for the New York Stock Exchange, as well as the Bitcoin blockchain in the decentralized web3 environment.

In the past, it’s been observed that Bitcoin tends to perform particularly well during the fourth quarter of the year, with November being a notably strong month. Additionally, December, which has shown strength in previous market upswings, appears optimistic for future performance.

Compared to any other month in its history, Bitcoin’s price experienced a greater increase in U.S. dollars during November alone. If the current market mood persists into the New Year, this could signal a powerful Santa Claus rally.

5. Pro-Bitcoin Republicans Hold Washington

During his first presidency, Donald Trump was open to the existence of Bitcoin. However, in his current term, he’s advocating for a deeper government comprehension and regulations that foster growth, thereby creating a conducive environment for further advancements in blockchain technology.

On December 6th, CNBC – a well-known financial news network – discussed the numerous pro-cryptocurrency nominations for Trump’s second term. As the president-elect was making his choices, the value of Bitcoin on crypto exchanges remained close to an all-time high of approximately $100,000.

In a speech at the Bitcoin Conference in Nashville, TN during his 2016 presidential campaign, Mr. Trump stated that those who believe Bitcoin poses a threat to the US dollar are mistaken, as it’s actually the other way around.

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2024-12-09 10:27