Economist Declares 'Santa Rally' on Bitcoin
U.Today - Crypto enthusiasts have also embraced the idea of a Santa Rally; it is not just a concept found on traditional markets. Essentially, it describes an increase in asset prices in late December that is frequently driven by optimism, lower trading volumes and positive sentiment during the holidays.
Although erratic, this phenomenon has been noted in the historical performance of Bitcoin in December. Alex Kruger, an economist, recently emphasized this trend when he declared the Santa Rally is finally here.
The recent recovery of Bitcoin's price following a decline to the 50 EMA appears to support his assertion. Because of the stability of this support level, which is around $94,500, Bitcoin has been able to recover toward $98,000, rekindling expectations for a higher year-end. At the moment, the Bitcoin chart shows a possible change in momentum. Bitcoin has increased in proximity to the psychological $100,000 threshold after plunging to a crucial support level. But things are not quite going smoothly yet.
The modest volume that has accompanied the upward move thus far indicates that, in the absence of more robust buying pressure, the rally may lose momentum. Regaining the $100,000 mark would be a huge psychological victory for Bitcoin if it keeps rising, possibly paving the way for future gains.
However, if the price does not rise above $100,000, there may be consolidation or even a retest of the $94,500 support. Should that level be broken, Bitcoin may move toward the next significant support level, which is $85,000. There is a surge of optimism following the Santa Rally, but traders should exercise caution.
Although a wider bullish phase may begin with the rally, cautious expectations are advised due to the lack of strong volume and ongoing market uncertainties. The resilience of Bitcoin at critical levels gives some hope for the time being, but whether or not this holiday cheer has enduring momentum will be determined over the coming days.
Source: Investing.com