Bitcoin “Santa Rally” coming to town?

• Bitcoin ↑ 152% since start of 2024

• Over past year Fed triggered moves of ↑ 3.4% & ↓ 3%
  

• Gained on average 11.30% in December over past 15 years

• Technical levels – $110,000, $107,000 & $100,000

Christmas may have come early for investors after Bitcoin surpassed $107,000 for the first time.

The “OG” crypto has been on a tear, recently boosted by growing optimism over its potential role as a US strategic reserve asset.

Prices are up over 10% month-to-date, pushing 2024-year gains beyond 150%.

Bitcoin and other cryptos remain supported by hopes of a more friendly regulatory environment under Trump. And this has attracted almost $10 billion into US exchange-traded funds since Trump’s election win on November 5th.

Another factor exciting bulls could be MicroStrategy…

MicroStrategy is the largest Bitcoin holder among publicly traded companies, accumulating 439,000 bitcoins valued at $47 billion.

The meteoric rise of Bitcoin has pushed MicroStrategy’s market cap to almost $100 billion with its shares up nearly 550% year-to-date.

Why does this matter?

MicroStrategy is set to join the Nasdaq 100 on December 23rd.

This is a major milestone for the company and crypto world given its massive exposure to Bitcoin.

Joining the Nasdaq 100 provides investors an indirect exposure to Bitcoin through investing in MicroStrategy.

In a nutshell, this is a welcome development for the crypto space and could fuel upside gains on both MicroStrategy and Bitcoin.

Bitcoin set for “Santa Rally”?

To be clear, the Santa rally is a phenomenon that happens in the stock market. This is where stock prices experience a rally in the final days of December through the first few days of January.

Historically speaking, Bitcoin has gained on average 11.30% in December over the past 15 years.

Given the positive sentiment toward cryptocurrencies, could a rally be on the horizon?

By the way…

The Fed decision on Wednesday could influence Bitcoin which has shown sensitivity to interest rates.

As discussed in the week ahead, the Fed is widely expected to cut interest rates by 25 bp.

Traders are currently pricing in a 97% probability of a 25 bp rate cut on Wednesday with the odds of another cut by March 2025 at 62%.

Over the past year, the US jobs report has triggered upside moves of as much as 3.4% or declines of 3% in a 6-hour window post-release.

Beyond the Fed decision, the revised US GDP and PCE report among other data could influence prices.

It’s not only Bitcoin that may experience big moves on Wednesday 18th December.

• DOGECOIN: ↑ 7.5 % or ↓ 4.1%

• AVALANCH: ↑ 6.0 % or ↓ 4.0%

• BITCOINC: ↑ 5.5 % or ↓ 3.0%

• CARDANO: ↑ 5.3% or ↓ 2.7%

• CHAINLINK: ↑ 4.7 % or ↓ 2.4%

• POLYGON: ↑ 4.0% or ↓ 3.0%

• ETHEREUM: ↑ 3.9% or ↓ 2.4%

• RIPPLE: ↑ 2.9% or ↓ 2.0%

• LITECOIN: ↑ 2.8 % or ↓ 1.9%

All cryptos listed above are offered by FXTM as Crypto CFD’s.

Technical outlook…

Bitcoin is firmly bullish on the daily timeframe. Prices are trading above the 21, 50, 100 and 200-day SMA however the Relative Strength Index (RSI) has entered overbought territory.

• A solid daily close above $107,000 could push prices to fresh all-time highs at $110,000 and beyond.

• Should prices slip below $105,000, this may encourage a selloff toward the psychological $100.000 level.