A debate in the Bitcoin community is getting too much attraction in which initiation of “Santa Claus Rally” has been questioned.
Santa Claus rally is a crypto economy event that usually comes into force before the expiry of a year. What happens is that the value of the entire crypto-economy surges to a great extent and the economy is led by Bitcoin.
But before triggering of “Santa Claus rally”, it has been seen that the crypto market undergoes deep correction. On the other hand, correction is judged with the all-time high (ATH) value of a digital asset. In the case of Bitcoin, for the year 2021 so far, Bitcoin’s ATH value was seen on 10th November 2021 when Bitcoin crossed US$ 69,000. In the week ending on 27th November, however, there was a 20% decrease in Bitcoin’s value. This decrease of 20% has been alleged to be a “Bitcoin correction” by crypto analysts and experts. But Bitcoin was quick in regaining most of the lost percentage and retreated by at least 17%.
It was expected that before the expiry of 2021, Bitcoin will face a correction but does this fall can be treated as correction or not.
There are divided opinions on this point. According to some, which includes Forbes also, Bitcoin’s correction has taken place, although the correction was not deep as expected. On the contrary, the majority believes that a 20% fall cannot be taken as “correction” and at best it can be labeled as “price reduction”.
Forbes’s viewpoint has been refuted by Glassnode, which is an independent digital asset analytical entity.
Glassnode provides statistics to base its argument. It suggested that in the year 2021, there were two obvious corrections that Bitcoin had undergone. The first was in between April and July when Bitcoin’s price collapsed by 53.4%. The second correction came after one month’s interval in September where the value again went down to 37%. However, in the so-called third correction of November, the value reduction was by far the year’s lowest i.e. 20%. Glassnode, therefore, argues that 20% reduction cannot, by any stretch of the imagination, be treated or least assumed as “Bitcoin correction”.
On the basis of Glassnode’s argument, it is highly unlikely that the Santa Claus rally would occur somewhere during the month of December. However, if one accepts Forbes’s theory, then it can be expected that the Santa Claus rally is due to take place. But the majority of experts are supporting the arguments of Glassnode. They too believe that the correction of 17% is not fair enough value on the basis of which Santa Claus rally can be expected.
In case if the rally occurs, then in the last December of 2020, Bitcoin’s value surged by more than 47%. Similarly, in the year 2017, the surge in Bitcoin’s value was phenomenal which was recorded @ 80%.