Altcoins surge in anticipation of a post-Christmas Santa Claus rally, fueled by a decline in Bitcoin price and dominance.
After a recent surge of nearly 5%, Bitcoin experiences a marginal 1% dip, contributing to a decline in Bitcoin dominance from just above 52% to approximately 50.5%. Despite the absence of substantial support from trading volume, the global cryptocurrency market cap sees a modest 0.50% decrease, settling at $1.67 trillion. The Crypto Fear and Greed Index retreats from 75 to 72, indicating a shift towards greed. Meanwhile, certain altcoins surge in anticipation of the traditional Santa Claus rally following Christmas.
Outlook for the Crypto Market Amidst the Santa Claus Rally
Traders express optimism concerning Bitcoin and major altcoins, particularly following a cooling of US Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) inflation data, with expectations of a pivot by the US Federal Reserve in the upcoming year.
Despite the ongoing holiday season resulting in reduced market activity across major trading platforms, the crypto market remains open. This week witnesses minimal macro events, except for employment data and short-term treasury bill auctions, with no significant crypto-related developments.
Crypto withdrawals associated with the conclusion of BUSD support and year-end stablecoin movements are the only notable occurrences, likely to exert limited influence on the crypto market.
The upcoming annual options delivery on Friday is a pivotal event, involving nearly half of Bitcoin and Ethereum options positions facing delivery. Traders are poised to initiate new positions, factoring in considerations such as the potential approval of a spot Bitcoin ETF, Bitcoin halving, and technical chart patterns.
As the U.S. Dollar Index (DXY) declines to 101.71 and the 10-year Treasury yield reaches a 6-month low, these factors could contribute to an upswing in Bitcoin prices.
While BTC hovers around the $43,000 mark, altcoins take center stage on Christmas. Despite a 1% decline in Bitcoin price over the past 24 hours, an uptick in trading volume suggests the potential for a rebound.
Crypto analysts, including CredibleCrypto, maintain a bullish stance. CredibleCrypto states, "Absolutely primed for the next leg up—hopefully, we get one more quick swipe into the low $43k’s to fill a few more of my bids first." Market expectations anticipate Bitcoin reaching $50,000 soon.
Key altcoins like ETH, SOL, BNB, XRP, ADA, and AVAX experience pullbacks after establishing robust upward momentum earlier in the week. Traders closely monitor trading volumes in spot and derivatives markets, anticipating a Santa Claus rally in the coming week.
On Christmas, AXS, QNT, ORDI, KDA, SEI, MINA, and other altcoins emerge as leading gainers, with AXS and KDA prices soaring by over 30% and 60%, respectively.
