Bitcoin is yet to break above the anticipated $100,000 milestone as it traded on a correction path for the majority of the just concluded week. However, current market trends suggest that the cryptocurrency will break through this $100,000 psychological threshold very soon. Particularly, past trends, coupled with current market indicators, suggest Bitcoin could be on the brink of a spectacular rally to close out the year.
Historical Post-Election December Rallies: A Bullish Trend
Bitcoin has a history of surging in the month of December following US presidential elections (in November). Notably, the cryptocurrency posted gains of 30.8% and 46.92% after the 2016 and 2020 elections, respectively. Interestingly, you could argue that the ecosystem surrounding the Bitcoin price is in a much better place than those two instances.
There are now Spot Bitcoin ETFs that expose the cryptocurrency to investments from institutional investors, something that was absent in the past two US presidential elections. These inflows from institutional investors have been efficient in gobbling up more Bitcoins, especially during profit-taking periods from both short-term and long-term holders.
November has already been a wonderful month for the Bitcoin price, with it ending the month 38% above where it started. As it stands, the focus is on December to see how well the Bitcoin price performs during the month.
The market sentiment, as measured by the Fear & Greed Index, is currently flashing extreme greed. As noted by crypto analyst Ali Martinez on social media platform
If the historical trend were to hold, a 30% or 46% gain in the Bitcoin price this December would see it reaching $125,000 or $140,000 before the year ends, or maybe somewhere in between.
On-Chain Data Indicates A Massive Bitcoin Supply Crunch
Adding fuel to the bullish fire, on-chain data reveals that over 55,000 Bitcoin, worth approximately $5.34 billion, have been withdrawn from exchanges in the past 72 hours. Such significant outflows often point to a supply crunch as investors move their holdings to private wallets, signaling a long-term bullish outlook among Bitcoin holders.
As it stands, the Bitcoin price is trading at $96,454, having traded with a range of $95,833 to $97,201 in the past 24 hours. With its historical December performance, strong market sentiment, and tightening supply, Bitcoin appears well-positioned to aim for the $125,000–$140,000 range before the end of the year.
However, the first resistance to break would be $100,000. Breaking above this level is likely to spark FOMO among investors. On the other hand, the Bitcoin price has to hold up above $90,000 in order not to invalidate most bullish theses. Fortunately, the average mining cost is $90,524 and the Bitcoin price has never fallen below its mining cost during bull runs.
Featured image from Pexels, chart from TradingView
