Bitcoin and cryptocurrency markets have been trapped in a downward trend for months, but with just a few weeks until Christmas and bitcoin bulls still upbeat, could we be in for (another) Santa rally?
The bitcoin price is around half its year-to-date highs, with most altcoins (but not all) struggling to keep pace with bitcoin and having a worse time of it.
Now, bitcoin and crypto heavyweights are predicting a sudden price surge, technical data is looking positive, and recent developments suggest 2020 could be a big year for bitcoin.
“We will see $10,000 bitcoin again and welcome $100,000,” ethereum cofounder and creator of bitcoin rival cardano, Charles Hoskinson, said last week, brushing off suggestions bitcoin could be in terminal decline as so-called FUD—fear, uncertainty and doubt. “Crypto is unstoppable. Crypto is the future.”
If bitcoin does stage a late in the year rally, it wouldn’t be the first time crypto markets have soared in December. Towards the end of 2013 bitcoin rocketed to what was an all-time high of over $1,000 per bitcoin.
A few years later, December 2017 saw bitcoin’s epic bull run peak at almost $20,000. But a lot has changed since then.
“I think bitcoin’s weakness since July is understandable,” Tom Lee, head of research at bitcoin and crypto strategy boutique Fundstrat Global Advisors, told CNBC in a recent interview, blaming the decline on increased regulatory scrutiny on crypto in the wake of Facebook’s troubled libra project and U.S. president Donald Trump’s criticism of bitcoin.
“I don’t think adoption has really grown since July and if you can’t grow adoption, network effects don’t take place and so bitcoin drifts lower. But does this change the 10-year, five-year, or even two-year outlook for bitcoin? I don’t think so.”
Lee is upbeat about the year ahead, pointing to new money flowing into crypto markets as equity reaches new highs, the eagerly-anticipated bitcoin halvening, scheduled for May, and China’s growing interest in bitcoin’s underlying blockchain technology.
Meanwhile, technical data remains surprisingly positive for bitcoin.
Bitcoin chart watchers are eyeing the so-called Trading Envelope Indicator, which could be “a crucial inflection point,” according to analysis by financial newswire Bloomberg.
A break below the indicator’s lower band could mean a sudden sell-off, though a bounce could herald a rally of around 15%.
Elsewhere, bitcoin’s “bullish three-day chart pattern is still intact,” bitcoin, crypto and blockchain news outlet Coindesk has found.
However, a bitcoin mini-rally over the U.S. Thanksgiving holiday weekend, which saw the bitcoin price add over 10% in less than 48-hours, has been almost erased.
The bitcoin price is now trading at around $7,300 per bitcoin, up from around $3,500 at the beginning of the year.
Despite insistence from bitcoin bulls that a return to all-time highs is just around the corner, bitcoin holders might have to be happy with a mere doubling of prices in 2019.