Bitcoin News Today: Bitcoin Rises on Short Liquidations, Eyes $100K as Santa Rally Hopes Build

Bitcoin is staging a comeback amid growing speculation about a "Santa rally" as key metrics suggest a potential bullish shift. The cryptocurrency climbed toward $90,000 in early Asia trading hours, with market analysts highlighting favorable chart patterns and strong short liquidation activity. A 6.5% increase from recent lows has fueled optimism, with some experts suggesting BTC could exceed $100,000 in the coming weeks.

A key indicator of this upward momentum is the rise in short liquidations, which often provide additional fuel for bullish trends. The BTC/USD pair reached an intra-day high of $89,850, signaling a possible breakout from a wide consolidation range. Analyst AlphaBTC highlighted the potential for a rally, with a target of $98,000 to $100,000 as the next major resistance level.

Bitcoin's price action reflects a broader narrative of recovery as it consolidates within a defined range. Analyst Captain Faibik pointed to a bullish megaphone pattern forming between $82,000 and $95,000. This pattern, according to the analyst, could lead to a 34% rally, potentially pushing BTC toward $120,000. The measured target of the megaphone pattern adds weight to the bullish case, especially given the extended consolidation period.

Despite these optimistic indicators, not all analysts share the same view. Some warn of potential volatility and downward risks, with projections of a drawdown to $70,000. Historical data from the last five years shows that the "Santa rally" window has produced diminishing returns, with the 2020 +34.5% gain being an outlier. Current market conditions mirror those of 2021, when BTC posted -7.9% returns over the same period. This comparison raises questions about the sustainability of the current bullish momentum.

Bitcoin's recent performance has drawn attention as it navigates a critical period in the market. The price has shown resilience, reaching a high of $89,850 on Monday, up 6.5% from a low of $84,400. This upward movement has been attributed to a combination of favorable chart patterns and strong short liquidation activity. Analyst AlphaBTC emphasized the importance of the $93,300 yearly open as a key level to watch, with the potential for further gains beyond $100,000.

Bitcoin is currently consolidating within a defined price range, forming a visually recognizable megaphone pattern

. Captain Faibik noted that the longer the consolidation, the stronger and bigger the eventual rally could be. This perspective is supported by the measured target of the megaphone pattern, which suggests a potential move to $120,000. However, the pattern's success is contingent on Bitcoin maintaining its current trajectory and not breaking below key support levels.

The market's reaction to the potential "Santa rally" has been mixed. While some investors and analysts are optimistic, others remain cautious. The historical performance of Bitcoin during the same period has been less than stellar, with only the 2020 rally producing significant gains. This historical context raises concerns about the likelihood of a repeat performance in 2025. Analysts are closely monitoring market conditions and key price levels to gauge the strength of the current bullish momentum.

Bitcoin's recent price action has also been influenced by broader market dynamics. The cryptocurrency's performance is often linked to macroeconomic factors, including interest rates and global economic conditions. As the market approaches the end of the year, investors are closely watching how these factors might impact Bitcoin's price. The potential for a "Santa rally" adds another layer of complexity, with many investors positioning themselves for either a significant upward move or a potential correction.

The current price of Bitcoin is underpinned by several technical indicators that suggest a potential bullish shift. The RSI on the weekly chart is at 37, below the neutral level of 50, indicating that bears remain in control. However, the RSI is flattening, signaling that selling pressure may be stabilizing. On the daily chart, Bitcoin was rejected at the psychological $90,000 resistance on Monday but found support at the 78.6% Fibonacci retracement at $85,569. This support level has been crucial in preventing a deeper correction.

The market is also closely watching key liquidity clusters that could influence Bitcoin's price. TedPillows identified a liquidity cluster at $85,200 on the downside and another around $91,000 on the upside. These zones are where leveraged positions are concentrated, and any forced liquidations could trigger rapid rebounds or breakdowns. The current range between $84,000 and $92,000 has formed a volatility coil, which could lead to explosive price movements if resolved.

In addition to technical and liquidity factors, Bitcoin's price is also being shaped by structural market forces. Strategy's 3.2% BTC treasury, which holds 671,268 BTC, is reducing circulating liquidity and creating scarcity. This institutional accumulation is reinforcing long-term bullish bias and providing structural support for the price. As new issuance is absorbed by holders, the reduced supply could contribute to upward pressure on Bitcoin's price.

The current market environment is characterized by a delicate balance between bullish and bearish forces. While the technical indicators and liquidity clusters suggest potential for further gains, the historical performance of Bitcoin during the same period raises concerns about the sustainability of the current bullish momentum. Investors are closely monitoring key levels and market conditions to determine whether the "Santa rally" will materialize or if a correction is on the horizon.

Bitcoin's price action is also influenced by broader market trends and investor sentiment. The recent volatility has led to increased caution among investors, with many taking a wait-and-see approach. The potential for a "Santa rally" has generated optimism, but the risks of a correction remain. Analysts are advising investors to stay informed and prepared for either scenario as the market approaches the end of the year.