As the Bullish ‘Santa Claus Rally’ Takes Hold, Bitcoin Traders Set Sights on $120K

Bitcoin (BTC) surged to a new all-time high of over $106,000 early Monday morning, fueling speculation that the cryptocurrency could soon reach the $120,000 mark as it enters the second half of December, a period traditionally marked by bullish momentum. Historical data from the last eight years shows that Bitcoin has ended December in positive territory six times since 2015, with gains ranging from 8% to as high as 46% in 2020, which remains an outlier.

Several factors have contributed to Bitcoin’s recent surge. One major catalyst is increased speculation surrounding U.S. president-elect Donald Trump’s potential moves toward establishing a federal bitcoin reserve. Additionally, cryptocurrency firms such as Riot Platforms and MicroStrategy have made large-scale Bitcoin acquisitions in recent weeks, further driving up demand. Moreover, the rising inflows into Bitcoin exchange-traded funds (ETFs) have been a key factor in pushing Bitcoin prices higher, with some analysts pointing out that traditional finance (TradFi) inflows are playing a larger role in the market.

“Bitcoin sentiment and price action are now largely driven by inflows from traditional finance, a development unlike anything we’ve seen in past crypto cycles,” said Augustine Fan, head of insights at SOFA. “This influence will likely continue to grow as more traditional firms create digital asset policies to tap into the vast revenue potential and respond to the changing political climate.”

Bitcoin’s recent price movements have shown signs of a robust uptrend, marked by higher lows, which suggests continued bullish momentum. The cryptocurrency has also formed a potential bullish flag pattern after recent gains, which could signal further upward movement.

December historically tends to be a strong month for Bitcoin, largely due to the “Santa Claus Rally” phenomenon. Over the past eight years, Bitcoin has seen positive December performance in six years, with gains ranging from 8% to as high as 46% in 2020. Seasonality in the markets plays a significant role in these trends, with demand typically rising ahead of the holiday season.

Looking ahead, many traders are now targeting the $120,000 level and beyond. “We see tremendous upside potential for Bitcoin and believe it could easily reach $125,000 by the end of 2025,” said Jeff Mei, COO of BTSE crypto exchange. “Although some argue that the rally’s gains have already been priced in, we think the bull market is just beginning.”

Mei also emphasized that it often takes time for institutional investors, family offices, and high-net-worth individuals to embrace Bitcoin, with many still deciding to allocate small portions of their portfolios to cryptocurrency. “Once this shift happens, the inflows into crypto could accelerate significantly. Add to that Trump’s pro-crypto appointments, the ongoing rate cuts, and stimulus spending from China, and there’s ample reason to remain bullish on Bitcoin,” Mei concluded.