As Christmas Eve approaches, the Bitcoin price is on the rise and is trading at $97,200 at the time of writing, with daily gains of 3.65%, weekly declines of 10%, and monthly gains of 0.15%.
Several analysts and investors are expecting a “Santa Rally” on December 24-25. Is it feasible?
On the previous day, the price of BTC approached monthly lows, trading at the level of 92,509 USD. These low levels represent a 14% drop from the historical levels of 108,000 USD .
A crypto analyst from X named Mister Crypto pointed out that every 4 years around the Christmas season there is a bullish rally in BTC.
«Bitcoin. I'm ready for the Santa rally!»
A CoinGecko report also supports the Santa Rally theory, as according to the report, between 2014 and 2023, cryptocurrencies saw an increase 8 out of 10 times after Christmas .
During that period, the total cryptocurrency market capitalization grew by between 0.69% and 11.87% in the week from December 27 to January 2.
However, today most crypto assets have been in the red (in weekly returns), with the total market capitalization falling from $3.8 trillion to the current $3.31 trillion. A decline of approximately 15.13% or an outflow of $590 billion.
Christmas leaves a return of 9.48% throughout the history of BTC
According to CoinGecko's report, from 2014 to 2023, if an investor had bought and sold Bitcoin during the Santa Claus rally period every year, they would have earned an average return of 1.32% pre-Christmas and 1.29% in the post-Christmas period.
In contrast, if that hypothetical investor had bet on Bitcoin's price performance throughout the month of December, their average return would have been 9.48% .
This means that profits made from speculating during the entire month of December would be about seven times greater than those made during the Santa rallies alone.
However, it is worth noting that such a rally does not always occur: In 2017, Bitcoin suffered its biggest setback with a 21.30% drop before Christmas. This means that during that period, far from rising, it fell significantly.
In addition, there were other years with smaller declines before Christmas, such as in 2015 when it fell by 1.37% and in 2019 with a slight decrease of 0.11%.
BTC Christmas Chart Analysis: Key Levels to Watch
Leaving aside the short-term perspective, the BTC charts show that the price is in a correction . From this long-term perspective, maintaining the current levels (above 90 thousand) is extremely positive for the price to rise.
However, if we are talking about a new bullish rally, we must take into account the following resistance levels: Firstly, the 98,500 USD or the EMA 100, a level that, if reached, would provide greater stability to the price.
The next level is the psychological line of $100,000. If BTC manages to stabilize above this resistance, then the price will be ready to test the resistance of $103,000. The next level to challenge would be the all-time high at $108,200.
Above the support, the price found a bottom at $92,413, which is a double bottom for the largest cryptocurrency.
If the price manages to break this line, the next level would be the psychological support of $90,000 and below that, $85,000.
For now, the RSI at 52 points indicates that BTC is tending towards neutrality. There is no clear control of the bears or bulls on the price.