Traders typically predict these two catalysts will drive crypto costs up or down in December – a ‘Santa Claus rally’ and tax loss harvesting.
The two phrases are older than cryptocurrency, generally mentioned by inventory merchants on the finish of every monetary yr. Just how correct are they for making shares or crypto value predictions?
Pentoshi On Crypto Prices Narratives
One of the preferred crypto Twitter accounts, Twitter.com/Pentosh1″>@Pentosh1 posted to his 657,000 followers to expect those two ‘narratives’ in December.
He added Wall Street bonuses, as did many in the replies, and Chinese New Year as a 2023 narrative for crypto prices. Many holders around since the 2018 bear market will recall these ideas.
While he didn’t expand on that tweet thread yet this November, Pentoshi has been critical of this type of fundamental analysis in previous years, saying ‘just trade the charts’ and ‘what matters is the trend’.
Santa Claus Rally
Last Christmas for example, Pentoshi Twitter.com/Pentosh1/status/1474013663698821122″>tweeted the picture under and his feedback that unhealthy merchants depend on narratives:
Data on Santa Claus rally:
Fact: It’s pure cope from unhealthy merchants + underwater bag holders
Where is the magical institutional bid and quantity that was coming this week? After they risked off for EOY however would threat on to entrance run? It’s you vs the charts. Narratives = rip-off.
Investopedia explains the justification for a Santa Claus rally as a ‘common feeling of optimism and seasonal happiness on Wall Street, and the investing of vacation bonuses‘.
The principle dates again to Yale Hirsch’s Stock Trader’s Almanac written in 1972.
Tax Loss Harvesting
Tax loss harvesting is outlined as promoting property to ‘restrict the quantity of taxes due on quick-time period capital positive factors, that are typically taxed at a better price than lengthy-time period capital positive factors‘.
Last December Pentoshi famous one narrative was that establishments would promote till the final enterprise day of the month, then the crypto markets would rally.
However the Bitcoin value motion was bearish on the 2021 shut, with the general macro downtrend being the deciding issue. In July 2022 Pentoshi Twitter.com/Pentosh1/standing/1551301709510709248″>made an interesting prediction that more funds ‘will blow up’ – the kind that focus on these type of crypto price narratives. Russian Oligarchs, Tax harvesting, etc. Most of these narratives came from the same VCs, TradFi guys, and funds that blew up or will blow up in a few months. Earlier this month it emerged Sam Bankman-Fried’s Alameda Research were insolvent and lost $3.7 billion during the 2021 bull cycle. The FTX exchange linked fund were previously imagined by many to be made up of expert traders and quants. Heading into December, Bitcoin is trading sideways, stuck in a 2% range at the time of writing around $16,500. Since hitting an all-time high of $69,000 on Binance against USDT in November 2021, Bitcoin has crashed as low as $15,476 one year on – a 78% correction. To the downside, some analysts predict the $12-$14k level could be tested as support. The 2019 high was $13,970 – plotted on the Bitcoin price chart above, just above the 2018 yearly open of $13,715. Pentoshi is unsure if Bitcoin will see a capitulation event and crash that low. Twitter.com/Pentosh1/status/1596917260320641024″>He’s predicting extra sideways accumulation, for an prolonged time frame – neither a Santa Claus rally nor tax loss promoting. To the upside, some merchants predict a bear market rally may take the Bitcoin value as excessive because the 2021 lows for a bearish retest. The June 2021 month-to-month wick hit $28,805. Pentoshi’s crypto value predictions are much like that of one other high dealer @SmartContracter – that Bitcoin may chop round in a narrower vary nicely into 2023. While most of his tweets provide technical analysis on quick time period value motion, in the long run certainly one of Pentoshi’s predictions is that NFT and gaming associated crypto tokens are a very good investment. Today he tweeted: NFT’s onboarded extra folks to crypto than something and NFT’s mixed with gaming could have a lot upside subsequent bull run imo. If I may choose a sector to be bullish on for adoption this might be it. Passionate folks and a serviceable trade and neighborhood with massive attain. He did not but title any particular altcoins or NFT collections. Here at CryptoNews we have been following the upcoming Calvaria: Duels of Eternity recreation which has now handed the $2 million mark in its token presale. We’ve additionally reported on RobotEra which is attracting early investor curiosity on the presale stage. Both are NFT-primarily based play to earn crypto video games tipped to be a success with players in 2023. Find their whitepapers at:Bitcoin Price Predictions
Best Crypto to Buy Now for the Next Bull Run
