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Bitcoin correction the weakest in 2021 so far, as hopes for the Santa Claus rally increase




In previous beef market cycles, there has been a measurable correction before a rally at the end of the year – and if the story rhymes, it may be on the cards again.

We have certainly experienced the correction: Bitcoin reached a record high of around $ 69K on November 10 and has retreated around 17% to today’s level.

Some mainstream media such as Forbes have taken the view that the current withdrawal has thrown the markets back into bearish territory with the rather nasty headline: “Did Bitcoin enter a bear market after falling 20% ​​from its ATH?” on an article from November 30th.

But the decline in November was actually the weakest correction in 2021[ads1], overshadowed by Bitcoin’s huge correction of 53.4% ​​over three months between April and July. The last correction in September was the second deepest, reaching 37% from April ATH.

In its “Week Onchain” report on November 29, analytics provider Glassnode argued that the current correction is just “business as usual for Bitcoin hodlers” suggesting it may soon be over. It also confirmed that this current market correction is “actually the least severe in 2021.”

With the exception of a fall in the stock market due to the Omicron variant situation getting worse, some believe that we may be on our way to a Santa Claus rally. It is a term from the stock market when prices rise during the last 5 trading days in December and the first 2 trading days in January, but it has also been noted in the crypto markets in previous years and is often an abbreviation for price increases throughout December.

In December last year saw a 47% increase in BTC prices through the month, and December in 2017 witnessed an 80% pump to a new all-time high at that time. Both were in beef markets like today.

At the time of writing, BTC traded for just over $ 57,000, so a Santa rally similar to last year could see prices rise to a top $ 80,000 before the end of the year.

8848 Invest’s co-founder Nikita Rudenia is also sure that a Santa Claus meeting will comment:

“Despite the obvious setbacks so far, Bitcoin is still on track to end the year at $ 70,000 per coin, and if this achievement is achieved, we could see the coin touch $ 75,000 in early 2022 before we get a major correction.”

Interestingly, Ether is currently giving better results. The ETH / BTC ratio is the highest it has been since mid-May at 0.082 BTC per ETH or around 12 ETH per BTC according to CoinGecko. This could lead to ETH leading further price gains in December.

Related: Forget the milk and cookies, Santa accepts Bitcoin this holiday season

After taking a deep dive into the patterns of the chain, Glassnode concluded that Bitcoin investors are in more profitable positions than during the September correction.

“Both long-term and short-term owners have more profitable offers than the September correction, which can generally be seen as constructive for the price.”

Glassnode reported that the total share of profitable supply held by short-term owners has increased by 60% since September. In summary, “in beef market conditions, this combination usually provides a fairly constructive short-term outlook.”

The hope of a Santa Claus meeting is therefore beginning to grow. Such a question at the end of the year can be attributed to a number of factors such as holiday celebrations and increased liquidity due to Christmas bonuses.

However, the new Omicron variant can put a damper on the party if there is a major impact on global financial markets and more shutdowns are enforced or seem likely. According to Nasdaq, investors can stand on the sidelines until further notice until more is known about the new viral strain.

On the upside, Bitcoin traded for only $ 18,857 this time last year.



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