Bitcoin rises to 88K, is the Santa Claus rally coming soon?

Last Friday, the US stock market (12/19) experienced a surge on the triple witching day, with the S&P 500 index rising consecutively, wiping out a week's worth of losses. Bitcoin jumped from 85K to 87K after the central bank's rate hike, and subsequently rose steadily, maintaining around 88K. The fear and greed index slightly rebounded, and on Friday (12/26), a large amount of options expired, which could exacerbate the already high fluctuation.

The US stock market surged on the Triple Witching Day, with Nvidia leading the way.

The trading volume on US exchanges last Friday (12/19) exceeded 26 billion shares, about 50% higher than the average over the past 12 months. The surge in trading volume coincided with the quarterly “triple witching day,” which is when derivative contracts related to stocks, index options, and futures expire.

The S&P 500 index rose continuously, erasing a week's losses. Nvidia led large-cap stocks, with Oracle's stock price soaring about 6.5%.

Is the Santa Claus rally coming soon?

Traders have been speculating whether the typical year-end “Santa Claus rally” will occur, which usually refers to the last five trading days of the year and the first two trading days of the new year.

According to data compiled by Citadel Securities, since 1928, the S&P 500 index has had a 75% chance of rising in the last two weeks of December, with an average gain of 1.3%. Over the past 33 weeks, individual traders have net bought bullish options on U.S. stocks for 32 weeks, marking the longest duration recorded in the company's data.

American banks say that investors are injecting funds into the U.S. stock market at a pace close to historical highs, hoping for lower borrowing costs, reduced tariffs, and tax cuts by 2026.

The market welcomes a relatively quiet end of the year, with the U.S. GDP data on Tuesday and initial jobless claims on Thursday still to come this week.

Bitcoin rises to 88K, with the gathering of put options on Friday likely to intensify Fluctuation.

The yield on Japan's 10-year government bonds has reached its highest level since 1999, and the yen has weakened, as despite the Bank of Japan raising interest rates by 25 basis points last Friday as the market expected, most anticipate that the future rate hike process will be relatively slow. The situation of yen carry trades being unwound has not occurred, which instead suggests a potential bearish sentiment being exhausted?

( The Bank of Japan raised interest rates by one basis point, the Japanese yen depreciates while Bitcoin rises. Is this the end of bad news? )

Bitcoin jumped from 85K to 87K after the Bank of Japan raised interest rates, and then gradually rose, maintaining around 88K. The CMC Fear and Greed Index has slightly rebounded, currently at 28/100 (“Fear”). Although this is an improvement from November's “Extreme Fear”, market sentiment remains fragile, with Bitcoin's market cap accounting for as much as 59%, indicating a tendency towards defensive strategies.

The options data shows that a large number of contracts are set to expire on Friday (12/26), which could exacerbate the already high Fluctuation. Call options (call) are concentrated around the strike price of $100,000 to $120,000, implying that the market remains optimistic about a year-end rebound. However, bears dominate in the short term, with a large number of put options (put) accumulating around the strike price of $85,000, which may pose significant Fluctuation risks for Bitcoin's price this week.

( Short positions gather 85K! Bitcoin's year-end options expiration may trigger downward pressure )

This article discusses Bitcoin rising to 88K, is the Santa Claus rally coming soon? Originally appeared on Chain News ABMedia.