Bitcoin correction weakest of 2021 so far, as hopes of Santa Claus rally rise

In bull market cycles past, there was a noticeable correction before a rally towards the end of each year. History may repeat itself.

The correction has been felt: Bitcoin reached an all-time high at $69K on November 10th, and has since retreated 17% to its current levels.

Forbes, a major media outlet, has stated that the current pullback has pushed markets back into bearish territory. The headline is: “Did bitcoin enter a bear market after falling 20% from its ATH?” in a Nov. 30, article.

However, November’s correction was the weakest of 2021. It was overshadowed in part by Bitcoin’s 53.4% correction over three month period between April and July. The September correction was the second-deepest, at 37% above April’s ATH.

Glassnode, an analytics provider, stated that the current correction was just “business as usual” for Bitcoin hodlers in its November 29 “Week Onchain” report. This suggests that it might soon end. This market correction is actually the mildest in 2021, it was also confirmed by Glassnode.

Some believe that we are on the right track for a Santa Claus rally, barring a stock market crash due to Omicron variant conditions getting worse. This is a term that the stock market uses to describe price increases in the last 5 trading day of December and the first two trading days in January. However, it has been used in crypto markets in the past and is often used as shorthand for price rises throughout December.

Last December saw a 47% increase in BTC prices. December 2017 also witnessed an 80% pump, which reached a new all time high of 83. Both were in bull market conditions like today.

BTC traded at just over $57K as of the writing. This could mean that prices could rise to $80K if there is a Santa Claus rally like last year.

8848 Invest cofounder Nikita Rudenia is also optimistic about a Santa Claus rally commenting on:

“Despite all the setbacks, Bitcoin is still on track for closing the year at $70,000 per currency. If this feat is achieved, Bitcoin could touch $75,000 early 2022, before we see a major correction.”

It is interesting to note that Ether is outperforming Bitcoin at the moment. According to CoinGecko, the ETH/BTC ratio has reached its highest level since May at 0.082 BTC/ETH or 12 ETH/ETH. This could lead to further price gains for ETH in December.

Related: Santa will accept Bitcoin this holiday season, so forget the cookies and milk!

Glassnode conducted a deep dive into on-chain patterns and concluded that Bitcoin investors are more profitable than they were during September’s correction.

“Both Short-term and Long-term Holders have more profitable supply than September’s correction, which can be generally regarded as constructive for price.”

Glassnode stated that the percentage of short-term holders holding profitable supply has increased by 60% in September. This combination often provides a very positive short-term outlook in bull market conditions.

The hopes of a Santa Clause rally are growing, so they are beginning to grow. This surge at the end can be attributed to many factors, including holiday cheer and increased liquidity thanks to Christmas bonuses.

The new Omicron variant could cause a disruption to the party if it has a significant impact on global financial markets or if more lockdowns are imposed. Investors may remain on the sidelines until more information about the new virus strain is available, according to Nasdaq.

Bitcoin traded at $18,857 last year.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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