Bitcoin Traders Now Target $120K as Bullish ‘Santa Claus Rally’ Gains Steam

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What to know:

  • Bitcoin (BTC) set a fresh record above $106,000 earlier Monday, with traders now targeting the $120,000 level.
  • Optimism in U.S. policies are driving bitcoin ETFs inflows higher, contributing to increased prices, some point out.
  • This month tends to be historically bullish for bitcoin in a move that’s colloquially termed the “Santa Claus Rally.”

As a seasoned crypto investor with a decade of experience under my belt, I must admit that the recent surge of Bitcoin (BTC) above $106,000 has caught my attention. The bullish sentiment surrounding BTC is palpable, and the targeting of the $120,000 level by traders seems like a reasonable expectation given the momentum we’ve seen so far.

On Monday, Bitcoin (BTC) reached a new high of over $106,000, and investors are now aiming for the $120,000 mark as the cryptocurrency progresses through the traditionally favorable month of December, which historically brings bullish trends.

Lately, factors fueling Bitcoin’s expansion involve heightened anticipation about potential U.S. President Donald Trump establishing a national Bitcoin depository, along with digital currency firms like Riot Platforms and MicroStrategy buying vast amounts of this cryptocurrency over the last few weeks.

Increased optimism about U.S. policies is leading to a surge in investments into Bitcoin ETFs, which in turn, is causing Bitcoin prices to rise, as some have noted.

According to Augustine Fan, the head of insights at SOFA, traditional finance (TradFi) inflows are currently driving the mood and market movements in Bitcoin, unlike any previous crypto cycle. This trend is expected to intensify as more traditional companies develop digital asset policies due to the substantial revenue potential and significant shift in the political climate.

Lately, Bitcoin’s price fluctuations suggest it’s making higher bottoms, which is a sign of a long-term upward trend. Following its recent peaks, the potential emergence of a bull flag or a bullish consolidation pattern might hint at more price increases ahead.

Historically, Bitcoin has a tendency to increase during the month of December, an occurrence often referred to as the “Santa Claus Rally.” Over the past eight years, Bitcoin has ended December with gains six times since 2015, ranging from a minimum of 8% to a maximum of 46%, as observed in the unusual year of 2020.

Seasonality refers to the pattern observed in assets where they exhibit consistent and recurring changes every calendar year. Although it may seem random, factors such as increased profit-taking around tax season (April and May), leading to temporary drops, or the generally positive sentiment during November and December due to increased demand before the holiday season, are some possible explanations behind these patterns.

Meanwhile, some traders are now targeting the $120,000 level and above for BTC in the coming year.

Jeff Mei, COO at BTSE crypto exchange, stated via Telegram that he believes bitcoin still holds a great deal of growth potential and could potentially reach $125k by the end of 2025. Despite some opinions suggesting that the upside has already been factored in over the past month, Mei asserts that the price increase is just beginning.

The reason for this is that it requires time for institutions, wealthy families, and high-net-worth individuals to become comfortable with the notion of investing 1%-3% of their portfolios in bitcoin and cryptocurrencies as a group. Once they do, there could be a significant increase in investments into crypto. Furthermore, Mei believes that due to Trump’s supportive stance towards cryptocurrency, the Federal Reserve’s continued interest rate reductions, and China’s ongoing economic stimulus, there are many compelling reasons to be optimistic about the future of cryptocurrencies.

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2024-12-16 09:45