Bitcoin fell only 17% from its historical high, the minor correction this year.
Before the year-end rebound, there will be a measurable pull back in previous bull market cycles. If the historical trajectory is consistent, this situation may occur again.
We have indeed experienced a correction: Bitcoin reached an all-time high of approximately $69,000 on November 10, and it has now fallen by about 17%.
Some mainstream media such as “Forbes” believe that the current correction has caused the market to fall into a bear market again. The same point of view was also expressed in an earlier article, “Has Bitcoin entered a bear market after falling 20% from a historical high?”
But the November decline was the weakest correction since 2021. In contrast, Bitcoin experienced a 53.4% correction in the three months from April to July. In September, the most recent correction was the second largest, down 37% from the historical high in April.
In the “Week Onchain” report released on November 29, the analysis provider Glassnode believes that the current correction is only “business as usual for Bitcoin holders,” implying that the correction may end soon. It also confirmed that the current market adjustment is “actually the least serious one in 2021.”
Some people believe that unless the stock market plummets due to the worsening of the Omicron variant, we may have a Santa Claus rally. This is a term from the stock market, referring to the last five trading days of December and January’s first two trading days, the price will rise; however, it had also been noticed in the crypto market a few years ago. Usually short for the price increase throughout December.
In December of last year, the price of BTC rose by 47%. In December 2017, the price of BTC rose by 80%, setting a record high. Both were in a bull market like today.
Recently, the transaction price of Bitcoin has just exceeded USD 57,000, so if there is a Santa Claus rally similar to last year, the price of Bitcoin may soar to USD 80,000 before the end of the year.
Nikita Rudenia is also confident of Santa’s rebound, commenting: “Although Bitcoin has seen a significant decline recently, it is still expected to close at the end of the year at 70,000 US dollars. If this feat is achieved, at the beginning of 2022, we may see Bitcoin hit $75,000, and then there will be a major correction.”
What’s interesting is that Ethereum currently performs quite well. According to data, the ETH/BTC ratio has reached the highest level since mid-May, at 0.082 BTC per ETH, or approximately 12 ETH per BTC. This may allow ETH to lead to further price increases in December.
After conducting an in-depth study of the on-chain model, Glassnode concluded that the current profitability of Bitcoin investors is better than during the September callback.
According to the report, short-term holders’ total proportion of good supply has increased by 60% since September. Therefore, Santa’s hopes of rebounding began to rise. Such an increase at the end of the year can be attributed to many factors, such as the festive atmosphere and the increased liquidity brought by Christmas bonuses.
On the bright side, at this time last year, Bitcoin was trading at only $18,857.
However, if the global financial market is significantly affected and more blockade measures are implemented or may be implemented, the new Omicron variant strain may bring a blow to Christmas. Therefore, according to Nasdaq, investors may stay on the sidelines for the time being until they learn more about the new virus strain.