Bitcoin Traders Position for Potential ‘Santa Rally’ as Policy Tailwinds Build
Accumulation trends and talk of new liquidity measures spark optimism for a December rebound.
After a sluggish October, Bitcoin may be setting up for a classic year-end rally — the seasonal “Santa Claus” surge that has historically lifted crypto prices through December’s lighter trading period.
Data from Coinglass shows Bitcoin finishing six of the last eight Decembers in positive territory, with monthly gains ranging between 8% and 46%. Analysts suggest that pattern could repeat this year as long-term holders resume accumulation and liquidity expectations improve.
“We’re seeing a shift from fear-driven selling to strategic positioning,” said Nick Ruck, director at LVRG Research. “With the Fed expected to ease policy and institutional inflows continuing, the stage is set for a constructive December.”
The so-called Santa rally reflects recurring market seasonality — where optimism, year-end portfolio rebalancing, and thin holiday liquidity amplify upside moves. In crypto, it often marks a transition from profit-taking to renewed accumulation ahead of a new cycle.
Policy Catalysts: Trump’s ‘Tariff Dividend’ Adds Liquidity Hopes
Analysts are also pointing to possible liquidity tailwinds from President Donald Trump’s proposed $2,000 “tariff dividend” stimulus and a new 50-year mortgage program aimed at easing homeownership costs.
“These proposals function as indirect liquidity injections,” said Augustine Fan, head of insights at SignalPlus. “The tariff dividend echoes COVID-era stimulus checks that fueled risk markets, while extended mortgages expand leverage capacity. Both are being treated as positive for risk assets.”
Markets have already begun reacting to these measures, with investors viewing them as signs of renewed fiscal and monetary accommodation heading into 2026.
Market Structure: A New Volatility Regime
While traders anticipate potential upside, analysts warn that Bitcoin’s volatility may evolve in character rather than disappear.
“Volatility in 2026 will likely stay structurally elevated, but it’s no longer driven by speculative hype,” said Rachel Lin, CEO of SynFutures. “It’s increasingly a product of institutional flows, derivatives positioning, and liquidity dynamics within tighter global conditions.”
Lin added that Bitcoin maintains a 0.6–0.7 correlation with U.S. liquidity measures like M2 growth and the Federal Reserve’s balance sheet. “If central banks tighten in response to inflation pressures, volatility could re-emerge sharply,” she said.
Accumulation Builds Despite Whale Selling
Bitcoin (BTC) has slipped about 3% in November, extending October’s weakness, but on-chain data shows smaller investors quietly buying while larger holders reduce exposure.
Wallets with over 10,000 BTC have been net sellers for three straight months, unwinding positions established during early 2025’s ETF inflows. In contrast, wallets with under 1,000 BTC have increased holdings, providing steady bid support.
Despite subdued momentum, analysts say the market backdrop remains constructive. With policy-driven liquidity potential, retail accumulation, and historical seasonality aligning, Bitcoin may once again follow its December playbook — turning consolidation into a late-year rally fueled by renewed optimism.
