Crypto enthusiasts also supported the idea of the Santa Rally; it is not just a concept found in traditional markets. Essentially, it describes the rise in asset prices in late December, which is often driven by optimism, lower trading volumes and positive sentiment during the holidays.
While this phenomenon is volatile, it was noted in Bitcoin’s historical performance in December. Alex Krueger, an economist, recently highlighted this trend by declaring that the Santa Claus Rally has finally arrived.
The recent recovery in Bitcoin price after falling to the 50 EMA seems to support his claim. Thanks to the stability of this support level, which is around $94,500, Bitcoin was able to recover to $98,000, reviving expectations for a higher level later in the year. At the moment, the Bitcoin chart shows a possible change in momentum. Bitcoin rallied near the psychological threshold of $100,000 after falling to critical support levels. But things are not going entirely smoothly yet.
The modest volume that has accompanied the upward move so far suggests that in the absence of stronger buying pressure, the rally may lose momentum. A return to the $100,000 mark would be a huge psychological win for Bitcoin if it continues to rise, possibly paving the way for future gains.
However, if the price does not rise above $100,000, consolidation or even a retest of the $94,500 support could occur. If this level is broken, Bitcoin could move to the next significant support level, which is $85,000. There is a surge in optimism following the Santa Claus rally, but traders should exercise caution.
While a broader bullish phase could begin with the rally, cautious expectations are advised due to the lack of strong volume and ongoing market uncertainty. Bitcoin’s resilience at critical levels for now offers some hope, but whether this holiday sentiment has sustained momentum will be determined in the coming days.
