Bitcoin has yet to break above the expected $100,000 mark as it traded on a correction path for most of the just-concluded week. However, current market trends suggest that the cryptocurrency will break through this psychological threshold of $100,000 very soon. In particular, past trends, combined with current market indicators, suggest that Bitcoin could be on the cusp of a spectacular rally to end the year.
Historic post-election December rallies: a bullish trend
Bitcoin has a history of rising prices in the month of December after the US presidential elections (in November). Notably, the cryptocurrency posted gains of 30.8% and 46.92% after the 2016 and 2020 elections respectively. Interestingly enough, you could argue that the ecosystem surrounding Bitcoin price is in a much better place than these two cases .
There are now Spot Bitcoin ETFs that expose the cryptocurrency to investment from institutional investors, something that was absent in the past two US presidential elections. This influx of institutional investors has been efficient in gobbling up more Bitcoins, especially during periods of profit-taking by both short- and long-term holders.
November has already been a great month for the Bitcoin price, ending the month 38% higher than where it started. As it stands now, the focus is on December to see how well the Bitcoin price performs throughout the month.
Market sentiment, as measured by the Fear & Greed Index, is currently flashing extreme greed. As crypto analyst Ali Martinez noted on social media platform
If the historical trend were to continue, a 30% or 46% increase in the Bitcoin price in December would see it 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 Crisis
Adding fuel to the bullish fire, data about the chain reveals that over 55,000 Bitcoin, worth approximately $5.34 billion, have been withdrawn from the stock exchanges in the past 72 hours. Such significant outflows often indicate a supply shortage as investors shift their holdings to private wallets, indicating a bullish long-term outlook among Bitcoin holders.
As it stands now, Bitcoin price is trading at $96,454, after trading between $95,833 and $97,201 over the past 24 hours. With its historic performance in December, strong market sentiment and tighter supply, Bitcoin appears well-positioned to target a $125,000-$140,000 range before the end of the year.
However, the first resistance to break would be $100,000. Exceeding this level will likely lead to FOMO among investors. On the other hand, the Bitcoin price must remain above $90,000 not to debunk most bullish statements. Fortunately, the average mining cost is $90,524 and the Bitcoin price has never fallen below the mining cost during bull runs.
Featured image from Pexels, chart from TradingView