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Bitcoin has only plummeted 17 percent from its all-time high, making this the shallowest correction of the year. There has been a meaningful decline before a rally at the end of prior bull market cycles, and if history repeats itself, it could happen again.
Bitcoin set an all-time high of about $69K on Nov. 10 and has since dropped around 17 percent to current levels.
November's Dip was the Weakest Correction of 2021
November's drop was the lowest correction of 2021, overshadowed by Bitcoin's massive 53.4 percent drop between April and July. The most recent revision, which occurred in September, was the second-largest, reaching 37 percent from the ATH in April.
Glassnode, in its November 29 "Week Onchain" report, said that the current correction is "business as usual for Bitcoin holders," implying that it will soon be gone. This recent market drop is "really the least severe in 2021," according to the report.
Some feel we're on track for a Santa Claus rally, barring a stock market crash as the Omicron variant scenario worsens. It's a stock market phrase for when prices climb during December's last five trading days and the first two trading days of January. Still, it's also been observed in crypto markets in prior years and is often used as a shorthand for price increases throughout December.
Last December, BTC values increased by 47 percent over the month, and December 2017 saw an 80 percent increase to a new all-time high. Both were in bull markets, just as we are now.
Ether is Currently Outperforming
Ether, surprisingly, is currently outperforming. According to a report, the ETH/BTC ratio is at its highest level since mid-May, at 0.082 BTC per ETH, or roughly 12 ETH per BTC. This could lead to more price rises in December for ETH.
"Both Long and Short-term Holders are holding more profitable supply than September's correction, which can generally be viewed as constructive for price.
As a result, expectations for a Santa Clause rally are beginning to rise. The end-of-year surge can be linked to various causes, including festive happiness and greater liquidity as a result of Christmas bonuses.
However, if a significant impact on global financial markets and more lockdowns are imposed or appear inevitable, the new Omicron variant might put a damper on the party. Investors may be on the sidelines for the time being.