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Analysts' Insights

Analysts' Insights

Bitcoin Santa Claus Rally Coming: Is Our $45,000 Target Achievable?

Executive Summary

In October, Bitcoin surged by +28%, elevating its year-to-date growth by +108%, which surprised market participants and commentators. However, it was no surprise to our readers. On September 20, Matrixport Research published a report forecasting the institutional support driving the Bitcoin price surge, harnessing our 90% probability breakout signal. This signal indicated that Bitcoin was poised for a breakthrough after two months of trading sideways.

Based on our historical analysis, the Bitcoin bull market is expected to continue. Bitcoin tends to be a solid trending asset because high prices attract more traders to jump on the price move. This, in turn, causes prices to rise even further. For example, when Bitcoin is up by at least +50% by the end of October, there is, on average, a 78% chance that Bitcoin will advance even more into year-end. Bitcoin rallied, on average, another +68% until year-end on seven of nine previous occasions. This analysis is based on thirteen years of Bitcoin history. 

While by itself, selling $26,000-BTC put options would not yield any significant return, a trader could buy half of the $45,000-BTC-strike call options with those premiums. Interestingly, $45,000 was the price target based on the ‘Matrix on Target ’report from February 3, 2023, titled ‘January Effect – Bitcoin to $45,000 by December’.

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