Bitcoin set a fresh record above $108,000 this week, with many traders and industry watchers now targeting the $120,000 level as the asset moves into the second half of a seasonally bullish December.
Status quo
Recent catalysts that have boosted growth in BTC include increased speculation of U.S. president-elect Donald Trump establishing a federal Bitcoin reserve, and crypto companies such as MicroStrategy purchasing billions worth of digital assets in the past few months. Analysts from JP Morgan outlined six key regulatory and market changes in the crypto industry under the Trump U.S. government, which could reshape the cryptocurrency landscape under the Trump administration and its congressional leadership. Several stalled cryptocurrency bills may quickly receive approval.
Meanwhile, optimism in U.S. policies is driving Bitcoin ETFs inflows higher, contributing to increased prices. TradFi inflows now dominate the market sentiment and price action in BTC unlike any other prior crypto cycle before. This influence will only grow as more and more traditional firms finally need to have a digital asset policy given the immense revenue opportunities and change in the political environment.
Will there be a choppy end to 2024?
Recent price action has shown Bitcoin forming higher lows, indicative of a sustained uptrend. The formation of a bull flag or a bullish continuation pattern after recent highs could signal further upward movement.
This month tends to be historically bullish for Bitcoin in a move that’s colloquially termed the "Santa Claus Rally." Data from the past eight years shows that Bitcoin ended December in the green six times since 2016, running at least 8% to as much as 40%. However, there is still uncertainty looming ahead as Federal Reserve chair Jerome Powell this week stated that FED is not allowed to own any type of Bitcoin assets.
Final words
Seasonality is the tendency of assets to experience regular and predictable changes that recur every calendar year. While it may look random, possible reasons range from profit-taking around tax season in April and May, which causes drawdowns, to the generally bullish November and December, a sign of increased demand ahead of holiday season. Meanwhile, some traders and investors are now targeting the $120,000 level and above for BTC in the coming year. Stay updated with Toobit Academy as the crypto market steps into an unknown era.
