Santa Rally in Crypto Markets

Crypto enthusiasts have adopted the concept of a Santa Rally, similar to traditional markets. This term refers to an increase in asset prices during late December, often driven by optimism, reduced trading volumes, and a positive holiday sentiment.

This phenomenon has been observed in Bitcoin's historical performance in December. Economist Alex Kruger recently highlighted this trend, asserting that the Santa Rally is finally occurring.

Following a decline to the 50 EMA, Bitcoin's recent price recovery supports this assertion. The stability of the support level around $94,500 has allowed Bitcoin to rise toward $98,000, reviving hopes for higher year-end prices. Currently, the Bitcoin chart suggests a potential change in momentum, as it approaches the psychological threshold of $100,000 after a dip to a critical support level. However, challenges remain.

The modest volume accompanying this upward movement signals that without stronger buying pressure, the rally may lose steam. Achieving the $100,000 mark would be significant for Bitcoin, potentially setting the stage for further gains.

Conversely, if Bitcoin fails to surpass $100,000, it might lead to consolidation or a retest of the $94,500 support. If this support is broken, the next key level to watch would be $85,000. While optimism is rising due to the Santa Rally, traders are advised to remain cautious.

Although a broader bullish phase might be initiated by the rally, it is prudent to maintain cautious expectations due to weak volume and ongoing market uncertainties. Bitcoin's resilience at critical levels provides some hope, but whether this holiday sentiment can sustain momentum will be revealed in the coming days.

This article was originally published on U.Today