Is Crypto Market Gearing Up For a Christmas/New Year Rally?

• Bitcoin’s volatile swings hint at potential recovery after a sharp 10% correction.
• Altcoins rally alongside Bitcoin, driven by reduced selling pressure and optimism.
• Crypto market rallies as holiday optimism stirs hopes for a year-end bounce.

Bitcoin opened the week at its highest price of the year, touching $108,250. Nevertheless, the cryptocurrency quickly went into correction mode and depreciated by 10% from its highs. The correction wiped out most of the monthly gains, and investors were left wondering if Bitcoin could continue its rally amid higher volatility.

Volatility Patterns Repeat

This is not the first time that Bitcoin has had such a strong rally and then a sharp pullback. The cryptocurrency hit $19,778 in December 2017 before falling by 84%. Likewise, Bitcoin traded at $64,647 in April 2021 and fell by 55%. Strengthening further from the $73,885 mark that it reached in March this year, Bitcoin slid down by 33% in August. These patterns capture the cryptocurrency’s tendency toward extreme price swings, which means it could easily bounce back.

Several important factors suggest that the recent pullback was likely to be short-lived. Mining output has declined since the previous halving, while the number of BTC held on exchanges is decreasing, meaning that selling pressure is diminishing. Spot Bitcoin ETFs have grown to manage over $34 billion of assets, and institutional investors have been key in this process. These factors are bolstering characteristics that could be used to underpin a recovery.

Altcoins and Market Gains

The overall cryptocurrency market has also recovered from the recent decline. Major tokens are gaining significantly, especially Bitcoin which has risen by 5.12% over the last one day. According to CoinMarketCap data, Ethereum’s price went up by 6% while Ripple went up by 8%. Binance Coin rose 5.5%, Solana was up 5.7%, and Dogecoin soared by 14%. Cardano was the best performing asset, rallying 17%, signalling that investors have regained their lost interest.

With the market recovery, rumors are emerging about the possibility of a rally before the end of the year. The positive seasonality and the positive change in the perception of institutional and retail investors may lead to new records. Traditionally, the holiday season boosts the cryptocurrency market, and many experts expect the same this year. If Bitcoin and other major cryptocurrencies continue to rise then the pre-Christmas bounce could be a reality.

The next few weeks will be critical for Bitcoin and the rest of the crypto industry. Despite the volatility, the sound base and the rejuvenated growth signals that the digitally traded assets could be poised for a good ending of the year. Market observers are keenly waiting to observe if the market could be able to regain its lost grounds.

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