Bitcoin price is trading 17% below the ATH above $69,000 making the current correction the weakest so far for 2021.
Analysis are still hopeful for a Santa Claus rally that may see BTC surge during December.
A Santa Claus rally similar to last year’s could see BTC rise to discover new prices above $80K.
At the time of writing, Bitcoin price is trading at $60,882 approximately 2% down on the day with a market cap of $1.09 trillion also risen 1.72% over the last 24 hours. The BTC bulls are fighting to keep the big crypto above the $57,000 immediate support as bears threaten to undo all in the run up to November 10.
BTC price is currently 17% below its November 10 all-time high (ATH) above $69,000. This is the weakest BTC price correction and the shallowest for the year so far, according to analysts.
It is Business As Usual For Bitcoin Hodlers
Bitcoin (BTC) has been largely bullish for the better part of 2021 hitting one all-time high (ATH) after another. A look at Bitcoin price action as displayed by the weekly chart should leave BTC ‘holders’ unshaken. The current Bitcoin correction of approximately 17% from the recent ATH above $69,000 is smaller compared to the declines seen in the recent past.
Even though some mainstream media outlets such as Forbes have suggested that the current price correction might plunge the crypto market back into the bearish zones. This was highlighted in their rather sensational headline “Did Bitcoin Enter A Bear Market After Falling 20% From Its ATH?” in their November 30 article.
But the current dip is actually the shallowest considering the previous bullish periods. It is also the weakest correction for the year 2021, overshadowed by Bitcoin’s massive 55% correction over three months from the ATH in April above $64,000 to the July 20 low around $29,200.
The September correction was the second deepest for the year 2021 when the crypto market flash crash took BTC approximately 27% lower from a high of $53,146 on September 07 to a low of $38,400 on September 21.
Glassnode, an on-chain analytics provider referred to the current BTC correction as just “business as usual for Bitcoin hodlers” hinting at a rebound soon. Their Week Onchain report released on November 29 also confirmed that the “drawdown from ATH actually being one of the least severe in 2021”.
BTC/USD Weekly Chart
Also compared to previous years, there was a 48% plunge from the ATH above $20,000 in December 2017to a low of just above $6,000 in February 2018.
Bitcoin Price May Present A Santa Claus Rally
Therefore, there is cause to worry as BTC remains bullish. Even though the markets are plunging due to the Omicron variant situation becoming worse and the Fed Chair Jerome Powell’s hawkish taper remarks, some believe BTC may still be on track for a Santa Claus rally. This is a term used to refer to the price rise of shared during the last 5 trading days of December and the first trading days of January every year. However, it is a bit longer for the crypto market as prices are usually expected to rise throughout December.
For example, in December 2020, there was a 47% surge in BTC prices throughout the month. The rally was even higher in December in 2017 where we witnessed an 80% pump to a new all-time high at the time. Both were in bull markets like we currently are in.
Therefore, holding above the $56 support wall is crucial for the bulls who may focus on pushing the price above the $60,000 psychological level. After which, the move towards new price above $80,000 could be in the offing if the big crypto undergoes a Santa Claus rally similar to one we saw last year as shown on the daily chart.
BTC/USD Daily Chart
This bullish narrative is accentuated by the entry of the Stochastic Relative Strength Index (RSI) into the overbought zone as shown on the same daily chart. This means that there is still more room for the bullish run as Bitcoin advocates remain hopeful about the BTC Santa clause rally.
Also note that the Parabolic SAR has just turned from bearish to bearish and flipped below the price adding credence to the bullish outlook. Note that as long as the parabolic SAR remains below the price, BTC will remain bullish and will gain more traction as the distance between the dots increases.
Nikita Rudenia, co-founder at 8848 Invest, an asset management consultant spoke to the Independent saying:
“As BTC is looking good to close November below the expected target of $60,000, investors are optimistic that the cryptocurrency will repeat its historic trend of ending the year on a stellar bullish note.
Despite the obvious setbacks thus far, Bitcoin is still on track to close the year at $70,000 per coin, and should this feat be achieved, we may see the coin touch $75,000 in early 2022 before we get a major correction.”
On the flipside, uncertainties around the new Covid-19 Omicron variant could dampen the party if there is a major impact on global financial markets and more lockdowns are enforced.
As such, failure to rise above the $60,000 could encourage the bears to push the favourite cryptocurrency towards the 100-day Simple Moving Average (SMA) at $54,359. If this happens, it will trigger massive orders to sell Bitcoin causing it to tag the 200-day SMA at $46,145.
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