Bitcoin is yet to interrupt above the anticipated $100,000 milestone because it traded on a correction path for nearly all of the just concluded week. Nonetheless, current market trends suggest that the cryptocurrency will break through this $100,000 psychological threshold very soon. Particularly, past trends, coupled with current market indicators, suggest Bitcoin could possibly be getting ready to a spectacular rally to shut out the 12 months.
Historical Post-Election December Rallies: A Bullish Trend
Bitcoin has a history of surging within the month of December following US presidential elections (in November). Notably, the cryptocurrency posted gains of 30.8% and 46.92% after the 2016 and 2020 elections, respectively. Interestingly, you would argue that the ecosystem surrounding the Bitcoin price is in a significantly better place than those two instances.
There at the moment are Spot Bitcoin ETFs that expose the cryptocurrency to investments from institutional investors, something that was absent up to now two US presidential elections. These inflows from institutional investors have been efficient in gobbling up more Bitcoins, especially during profit-taking periods from each short-term and long-term holders.
November has already been an exquisite month for the Bitcoin price, with it ending the month 38% above where it began. Because it stands, the main target is on December to see how well the Bitcoin price performs throughout the month.
The market sentiment, as measured by the Fear & Greed Index, is currently flashing extreme greed. As noted by crypto analyst Ali Martinez on social media platform X, this level of optimism amongst investors is paying homage to the dramatic Bitcoin price rally during its last bull run, where it surged from $15,000 to $57,000 in a matter of weeks.
If the historical trend were to carry, a 30% or 46% gain within the Bitcoin price this December would see it reaching $125,000 or $140,000 before the 12 months ends, or possibly somewhere in between.
On-Chain Data Indicates A Massive Bitcoin Supply Crunch
Adding fuel to the bullish fire, on-chain data reveals that over 55,000 Bitcoin, price roughly $5.34 billion, have been withdrawn from exchanges up to now 72 hours. Such significant outflows often point to a supply crunch as investors move their holdings to personal wallets, signaling a long-term bullish outlook amongst Bitcoin holders.
Because it stands, the Bitcoin price is trading at $96,454, having traded with a spread of $95,833 to $97,201 up to now 24 hours. With its historical December performance, strong market sentiment, and tightening supply, Bitcoin appears well-positioned to aim for the $125,000–$140,000 range before the tip of the 12 months.
Nonetheless, the primary resistance to interrupt could be $100,000. Breaking above this level is probably going rto spark FOMO amongst investors. Then again, the Bitcoin price has to carry up above $90,000 so as to not invalidate most bullish theses. Fortunately, the typical mining cost is $90,524 and the Bitcoin price has never fallen below its mining cost during bull runs.
Featured image from Pexels, chart from TradingView