Will Santa’s parade be neglected?

Bitcoin (BTC) surged toward $90,000 during Asian trading hours on Monday as a key market metric suggested a “tactical” reversal potential for BTC's price.

Main Receptors:

Bitcoin is up 6.5% from recent lows, fueling “Santa Rally” hopes with targets as high as $120,000.

Short streams dominate, which can provide fuel for bulls.

Bitcoin price must not fall below $84,000 for a sustained recovery.

When BTC hits $5,000, talk of a “Santa Rally” will return

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD hit an intraday high of $89,850, up 6.5% from a local low of $84,400.

Analyst AlphaBTC said in an X post on Monday that Bitcoin is “looking for a Santa Rally.”

The accompanying chart suggests that the ongoing recovery will see the BTC/USD pair move higher, first at $93,300 on the year and later towards the $98,000 and $100,000 resistance zone.

“Give us an early X-mas present and send it around $98-$100K.”

After consolidating in a broad range between $82,000 and $95,000 since November 22, co-analyst Captain Fibic said Bitcoin was looking to break out of a bullish megaphone pattern.

Related: $90K BTC vs. Record gold price: 5 things to know in Bitcoin this week

“The longer the consolidation, the stronger and bigger the next rally,” added the analyst.

The megaphone pattern has a measured target of $120,000, which represents a rally of 34% from the current price.

Not all analysts expect the “Santa's Rally” to come true, however, with six-figure BTC price predictions clashing with warnings of a $70,000 drop.

Tracking the “Santa Rally” window (December 24 – January 2) over the past five years, RD, Bitcoin is posting “diminishing returns and real selling pressure,” with a +34.5% gain in 2020.

The chart below is based on a four-year cycle with “2025 positioned as 2021 in the post-halving space” with BTC posting a -7.9% return over this period, the analyst added:

“So far in December, we're seeing the same structural signings as 2021, and the heavyweights are entering the festival bidding.”

Bitcoin derivatives give bulls a “tactical” advantage

According to CryptoQuant analyst Axel Adler Jr. in a Monday X post, Bitcoin's current market setup offers strong tactical upside potential with a future market-friendly derivatives structure.

“BTC is entering a window for a Santa rally: the regime's output is bullish but not overheated.”

The chart below shows Bitcoin's bearish effect of 16.3%, placing the BTC/USD pair in the upper neutral zone in a historically bullish signal.

The key for bulls comes from the liquidity structure of traders, which indicates the dominance of short position closures, which puts upward pressure on the price.

The Long/Short Liquidity Dominance Oscillator has dropped to -11%, indicating an increase in forced short position closing, while the 30-day moving average remains positive at 10%, as shown in the chart below.

“This difference suggests a recent increase in forced short position closures,” he said.

“The Dominance of Short Liquidations Creates Tactical Fuel for Flipping.”

Bitcoin's key support remains at $84,000

After retesting on November 11, the price of Bitcoin successfully held above the psychological level of $84,000. This has been a critical level on traders' radars and one that must be guarded against to avoid further decline.

Trader and analyst Daan CryptoTrades said $84,000 “remains a key area for bulls to defend in the higher timeframe.”

Glassnode's cost base distribution heat map reinforces the importance of this step. Immediate support was placed at $84,000-$85,600, investors gained about 976,000 BTC.

Holding above this level is a key prerequisite to gaining momentum to $100,000 or more.

According to Cointelegraph, the bears will look to breach the support at $84,000, with their eyes on the next target at $80,000.

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