Bitcoin has yet to surpass the expected $100,000 level as it traded on a correction path for the majority of the week that just ended. However, current market trends indicate that the cryptocurrency It will penetrate This psychological threshold of $100,000 is too soon. In particular, past trends, combined with current market indicators, suggest that Bitcoin could be on the verge of a stunning rally to close out the year.
Historic December Post-Election Marches: Uptrend
Bitcoin has a history of rising in December after the US presidential election (in November). It is worth noting that the cryptocurrency recorded gains of 30.8% and 46.92% after the 2016 and 2020 elections, respectively. Interestingly, you could argue that the ecosystem surrounding the Bitcoin price is in a much better position than either of these two situations.
There are now Spot Bitcoin ETFs that expose the cryptocurrency to institutional investors, something that was absent in the last US presidential election. These inflows from institutional investors have been effective in gobbling up more bitcoins, especially during periods of profit-taking for short- and long-term holders.
November was indeed a great month for the price of Bitcoin, ending the month 38% higher than where it started. For now, the focus is on December to see how well the Bitcoin price performs during the month.
Market sentiment, as measured by the Fear and Greed Index, is as well Currently flashing extreme greed. As cryptocurrency analyst Ali Martinez pointed out on social media platform
If the historical trend continues, Bitcoin’s 30% or 46% price rise in December of this year will reach $125,000 or $140,000 before the end of the year, or perhaps somewhere in between.
On-chain data indicates a massive Bitcoin supply crunch
Adding fuel to the rising fire, Data on the string It reveals that more than 55,000 bitcoins, worth about $5.34 billion, It has been withdrawn from exchanges During the past 72 hours. Such large outflows often indicate a supply crunch as investors move their holdings into private wallets, indicating a long-term bullish outlook among Bitcoin holders.
Currently, Bitcoin is trading at $96,454, having traded in a range between $95,833 and $97,201 over the past 24 hours. Thanks to its historic December performance, strong market sentiment, and tightening supply, Bitcoin appears well-positioned to target the $125,000 to $140,000 range before the end of the year.
However, the first resistance level to break will be $100,000. A break above this level is likely to create fear among investors. On the other hand, the price of Bitcoin It should hold above $90,000 In order not to invalidate most of the bullish theses. Fortunately, the average mining cost is $90,524 and the price of Bitcoin has never fallen below the mining cost during bull periods.
Featured image from Pexels, chart from TradingView
Comments are closed, but trackbacks and pingbacks are open.