Bitcoin, the leading cryptocurrency, recently hit an intraday high of $51,375 on the Binance exchange. It experienced an increase of over 5% in the 24-hour period.
The crypto king is now trading at its highest level since Dec 7, recovering 22% from the local low of around $42,000. SushiSwap (SUSHI) leads the market recovery, up 23.74%, and the decentralized finance (DeFi) sector outperforms the rest of the market. Aave (AAVE), Compound (COMP) and Uniswap (UNI) also posted double-digit gains.
With the rise, cryptocurrency traders are hoping that the notable calendar effect “Santa Claus rally” could push the Bitcoin price higher by the end of the year.
The term was coined by 1972 US stock traders. Over the past 92 years, the S&P 500 has recorded a 77% win rate in a 9-day trading period that included the last trading session of the year and two trading sessions in January.
The biggest reason for the Santa Claus Rally is the expectation that the markets will rise in the first week of the new year. One of the biggest factors in the rally is that the markets are in this expectation.
Historically, Bitcoin has outperformed the US stock market in the aforementioned 9-day period, so the probability of a Santa Claus rally is much lower for Bitcoin compared to stocks. However, if the flagship cryptocurrency continues its strong recovery, there could be an outlier this year.
Finally, it is worth noting that Bitcoin needs to gain another 11% in the remaining seven days to end December in the green.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.