Bitcoin (BTC) reached a new all-time high of over $106,000 earlier on Monday, sparking speculation that the cryptocurrency could soon hit the $120,000 mark as it enters the second half of a traditionally bullish December. This follows a pattern established over the last eight years, where Bitcoin has ended December in the green six times since 2015, with gains ranging from 8% to as much as 46% in the standout year of 2020.
Several recent factors have contributed to Bitcoin’s impressive performance. Increased speculation about U.S. president-elect Donald Trump’s potential creation of a federal bitcoin reserve has raised optimism, along with large-scale purchases of Bitcoin by crypto firms like Riot Platforms and MicroStrategy. In addition, Bitcoin exchange-traded funds (ETFs) have seen growing inflows, further boosting demand and price action.
“Traditional finance (TradFi) inflows are now dominating Bitcoin sentiment and price movement in ways we’ve never seen before,” said Augustine Fan, head of insights at SOFA, in a message to CoinDesk. “This influence will only intensify as more traditional firms recognize the massive revenue potential and need to develop a digital asset policy in light of shifting political landscapes.”
Bitcoin’s recent price action is showing signs of a sustained uptrend, as the cryptocurrency has been consistently forming higher lows. The development of a bullish flag pattern after recent highs could signal more upside potential in the near term.
December is historically a strong month for Bitcoin, driven by the so-called “Santa Claus Rally.” This seasonal phenomenon has seen Bitcoin end the month in the green in six of the past eight years, with gains ranging from 8% to 46% in 2020, a notable outlier. The month’s strong performance is often linked to increased demand as the holiday season approaches, with seasonality playing a key role in Bitcoin’s price fluctuations.
Looking ahead, many traders are optimistic about Bitcoin’s potential for further gains, with some setting their sights on the $120,000 level or higher. “We believe Bitcoin still has significant upside potential and could easily hit $125K by the end of 2025,” said Jeff Mei, COO of crypto exchange BTSE, in a Telegram message. “While some argue the upside is already priced in, we believe the rally is just getting started.”
Mei added that it takes time for institutions, family offices, and high-net-worth individuals to warm up to allocating 1%-3% of their portfolios to Bitcoin and cryptocurrency in general. “Once that happens, crypto inflows could skyrocket. With Trump’s pro-crypto appointments, continued rate cuts, and stimulus spending from China, there’s plenty of reason to stay bullish,” Mei concluded.
