With the ‘Santa Claus Rally’ Heating Up, Bitcoin Traders Anticipate a Push to $120K

Bitcoin (BTC) recently hit a fresh all-time high above $106,000, prompting traders to set their sights on the $120,000 milestone as the digital asset enters a historically bullish December. Over the last eight years, Bitcoin has closed December with gains six times, delivering returns ranging from 8% to an impressive 46% during the standout year of 2020.

The rally has been fueled by a mix of institutional activity, macroeconomic factors, and renewed optimism around U.S. regulatory policies. Speculation that president-elect Donald Trump could establish a federal Bitcoin reserve, along with aggressive Bitcoin acquisitions by firms like MicroStrategy and Riot Platforms, has strengthened market sentiment. Additionally, rising inflows into Bitcoin exchange-traded funds (ETFs) have amplified buying momentum.

“Traditional finance inflows have become the dominant force driving Bitcoin’s price action in this cycle,” noted Augustine Fan, head of insights at SOFA. “The growing institutional interest and evolving political landscape will only accelerate this trend as more firms develop digital asset strategies.”

Recent price movements have demonstrated a clear uptrend, with Bitcoin establishing higher lows, signaling continued bullish momentum. Technical patterns, such as a developing bull flag, further hint at a breakout toward higher price levels.

The so-called “Santa Claus Rally” phenomenon — where Bitcoin has often seen significant gains in December — adds further weight to traders’ bullish outlook. Historical data reveals that the final month of the year has produced outsized returns, driven by factors such as holiday demand, seasonality trends, and institutional positioning.

Some analysts remain confident that Bitcoin’s upside potential is far from exhausted. “Given the macro backdrop, we believe Bitcoin can climb to $125,000 within the next 12 to 18 months,” said Jeff Mei, COO at BTSE. “Institutional adoption is only in its early stages, and as allocations rise to 1%-3% of portfolios, inflows will accelerate.”

Mei also cited supportive factors like Trump’s pro-crypto stance, easing monetary policies, and China’s liquidity injections as tailwinds that could drive Bitcoin to new highs. “The convergence of these catalysts sets the stage for a sustained rally well into next year,” he added.