A well-known adage on Wall Street is that unless there is an outside influence, a bull market will often continue to go forward.
According to crypto services company Matrixport, Bitcoin has historically lived up to the proverb based on Sir Isaac Newton’s third law of motion and may do so once more, reaching as high as $56,000 by the end of the year.
Markus Thielen, head of research and strategy at Matrixport, wrote a note to clients on Thursday that stated:
“If Bitcoin is up at least +100% by this time of the year, then there is a +71% chance or five in seven that Bitcoin would finish the year higher with average year-end rallies of +65%.”
“We could call the six to seven weeks from early November to mid-December Bitcoin’s Santa Claus Rally, as the cryptocurrency typically reaches its peak by December 18th.”
Currently trading over $35,000, Bitcoin has increased by 114% year to date as of this writing. The remarkable increase may be explained by a number of factors, such as haven demand, spot ETF optimism, and theories that the Federal Reserve’s cycle of liquidity tightening has peaked.
By year’s end, Bitcoin might trade above $65,000 thanks to the anticipated 65% price increase.
Thielen added that, considering these statistics, Bitcoin still presents an opportunity for upward growth, with the potential for a year-end rally of +65% that would bring prices to $56,000.
The graph displays Bitcoin’s historical performance for the first ten and last two months of each year between 2010 and 2022.
Bitcoin has gained at least 100% in the first ten months in seven of the last twelve years. In the last eight weeks, Bitcoin has increased in value by an average of 65% over the past seven years.
“When Bitcoin is up at least by 50% by the end of October, there is, on average, a 78% chance that Bitcoin will advance even more into year-end. Bitcoin rallied by another 68% until year-end on seven of nine previous occasions. This analysis is based on thirteen years of bitcoin history,” Thielen stated.
It’s important to emphasize that while historical data can provide insights, it doesn’t guarantee future outcomes. However, the likelihood of history repeating itself remains significant, particularly in anticipation of the upcoming bullish mining reward halving scheduled for early next year.
Furthermore, it seems that the US Federal Reserve’s decision to maintain interest rates between 5.25% to 5.5% validated the market’s optimistic attitude that has prevailed since October.
The chairman of the Federal Reserve, Jerome Powell, reaffirmed the bank’s “strong commitment” to reducing inflation. Powell stated during the meeting that recent indicators suggest that economic activity has been expanding at a strong pace – well above earlier expectations.
While maintaining a restrictive monetary policy for the foreseeable future, the majority of committee members think that another rate hike is necessary before the year ends.
After the FOMC meeting, the price of Bitcoin started to rise again, rising beyond $35,000 to trade at a record high for the year. BTC is currently trading at $35,383, up by 3.3% over the previous day.