Bitcoin correction weakest so far in 2021, as hope for its rally

In previous bull market cycles, there has been a measurable correction preceded by a year-end rally – and if the story is stable, it could reoccur.

We’ve definitely gone through a correction: Bitcoin hit an all-time high of around $ 69,000 on November 10th and has fallen by around 17% to current levels.

Some mainstream media outlets like Forbes have got to the point with the rather buoyant headline that the current decline has pushed the market back into bearish territory: “Bitcoin entered a bear market after falling 20% ​​of its ATH levels?” to an article from November 30th

But the November decline was actually the weakest correction of 2021, overshadowed by Bitcoin’s massive 53.4% ​​correction in the three months of April through July. The most recent correction was September’s second deep correction, hitting 37% of April’s ATH.

In its “Week Onchain” report dated November 29, analysts Glassnode argued that the current correction was just “business as usual for Bitcoin sellers,” suggesting it may end soon. It also confirmed that this current market correction “is actually the least severe in 2021”.

To keep the Omicron variant situation from worsening, some believe we might be on our way to a Christmas rally. It is an exchange term in which the price increases during the last 5 trading days of December and the first 2 trading days of January, but it has also been recorded in the cryptocurrency market for the last 5 days of recent years and usually represents price increases in December.

Last December, the BTC price rose 47% over the course of the month, and in December 2017 it rose 80% to a new all-time high. Both are in a bull market like they are today.

At the time of writing, BTC is only trading at just over $ 57,000, so a Christmas rally similar to last year’s could bring the price to $ 80,000 before the year ends.

8848 Spend co-founder Nikita Rudenia was also confident that a Santa Claus rally would be held, commenting:

“Despite the setbacks apparent so far, Bitcoin is still on track to end the year at $ 70,000 per coin and if it hits that mark we could see the coin hit $ 75,000 by the end of the year. Early 2022, before we have a big correction. “

Interestingly, Ether is doing better now. According to CoinGecko, the ETH / BTC ratio is .082 BTC per ETH or around 12 ETH per BTC, the highest since mid-May. This could lead to ETH leading further price gains in December.

Related: Forget about milk and cookies, Santa will accept Bitcoin this holiday season

After delving into on-chain patterns, Glassnode concludes that Bitcoin investors are in more profitable positions than when they saw the September correction.

“Both long and short holders keep the supply cheaper than the September correction, which can generally be seen as price-boosting.”

Glassnode reports that the total proportion of profitable supply held by short-term owners has increased 60% since September. It sums up, “In bull market conditions, this combination generally offers a fairly constructive short-term outlook”.

Therefore, the hopes for a Santa Claus rally are growing. Such a year-end outbreak is due to a number of factors, such as the cheers for the Christmas season and the increased liquidity from the Christmas bonus.

However, the new Omicron variant could affect the party if there is a major impact on global financial markets and further lockdowns are enforced or appear likely. According to Nasdaq, investors can stay on the sidelines until more is known about the new virus.

Bitcoin, on the other hand, was only trading at $ 18,857 at the time last year.

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