Bitcoin continues to trade moderately in the 15,600–17,200 range after a small burst of volatility.
But despite the general panic, the Santa Claus Rally could still happen. At least that's what some crypto influencers think. But first things first.
Renowned crypto analyst Benjamin Cowen recently reported that Bitcoin bears are getting exhausted after the price of the main cryptocurrency fell over 75% from its all-time high above $69,000 last year.
Cowen studied the profit-loss ratio of the BTC supply and determined that the bears are steadily losing momentum as the price falls.
The analyst believes that in each step down, the bears continue to lose momentum, which means that they begin to slow down "as we go deeper and deeper into the bear market." He added that "eventually the bulls sort of offset the bears."
According to him, once Bitcoin bulls start to take over, the market will enter a "long accumulation phase" before the price of the cryptocurrency starts to form for a new bull cycle. The top cryptocurrency reflects previous bear market cycles despite the unique challenges the industry is facing.
Optimism despite industry downturnThis year, the crypto industry has faced a wave of bankruptcies of lenders such as Celsius and BlockFi, and the collapse of the Terra ecosystem, as well as the FTX cryptocurrency exchange.
But despite these issues and BTC's significant drawdown, various analysts remain optimistic about the main cryptocurrency.
The fund manager of investment giant VanEck recently predicted that the price of the main cryptocurrency could rise to $30,000 in the second half of 2023 after falling to a low around $10,000–12,000.
Earlier this month, billionaire investor Tim Draper, founder of Draper Associates and one of Silicon Valley's most famous investors, doubled down on his $250,000 Bitcoin price prediction, saying the cryptocurrency would hit that mark by June next year.
Draper is not the only billionaire bullish on cryptocurrencies. Billionaire investor Mike Novogratz revealed that he still believes BTC will trade at $500,000 per coin in the future, but shelved his forecast for interest rate hikes by the Federal Reserve and other central banks to curb inflation.
Santa Claus rally could still happenAnother well-known crypto strategist under the pseudonym Kaleo believes that the upcoming Christmas holidays will bring a Bitcoin rally to the market. It will happen precisely because no one expects it since the hash rate remains high.
The analyst notes that since most sentiment predicts a crash, there is a chance that the opposite will happen.
He says that Bitcoin is going to "continue the grind up to $17,500, then accelerate and initiate the squeeze to $18,500."
Kaleo notes that Bitcoin is showing strength in one closely monitored metric, hash rate. He says the hash rate remains strong despite the cryptocurrency trading below $20,000 after the FTX crash.
"One of the most impressive charts out there is Bitcoin hash rate. After over a month of BTC trading beneath $20,000, there's yet to be any real capitulation for miners."The hash rate measures the processing power of the Bitcoin network as the speed at which a miner completes an operation. A higher hash rate indicates a stronger network and better security.
He wonders how long the hash rate can stay at such a high level.
"The indicator below paints a general picture of BTC price vs. miner production cost. Obviously, there are plenty of variables here and certain miners might have significantly lower average costs, but it does make you wonder how much longer before we see someone capitulate."However, there is now an opinion in the crypto community that the main cryptocurrency may fall even below the lows reached amid the collapse of FTX.
It's worth noting that if the Christmas rally forecast comes true, it probably won't break the current technical picture.