Bitcoin recovers above $85,000: Is there still a chance for a "Santa Claus rally"?

After a sharp decline in November, Bitcoin bulls are keeping a close eye out for signs that selling pressure has cooled off, while hoping for a “Santa rally” in December.

At the beginning of the month, renowned Polish analyst Robert Ruszale was among those who believed in this scenario. He predicted that Bitcoin would recover from the 50-week exponential moving average (EMA)—a signal he expected would sustain the uptrend into December.

However, that expectation was quickly challenged when a key support zone was breached, sending BTC price plunging to $80,000 last week. Ruszale later publicly apologized for his inaccurate prediction.

Currently, Bitcoin has rebounded back above the $85,000 mark, as the market awaits the Fed’s next interest rate decision meeting.

BiBTC/USDT daily chart | Source: TradingView## Could the recovery extend into December?

In the options market, Deribit Insights has noted a significant phenomenon: a major fund or mining group that was heavily trading during the recent correction has suddenly gone “silent.”

For several consecutive weeks, these “whales” had been consistently selling call options and accumulating put options—a classic defensive strategy to protect their portfolios. Their sudden halt in activity suggests the market may anticipate a rebound, making the need for hedging less urgent than before. Nevertheless, Deribit warns that short-term caution still prevails, as evidenced by the still-high volume of put purchases.

“Put skew has therefore increased sharply, due to strong demand for puts while selling or capping pressure on call contracts has also risen, often to finance defensive positions.”

NguSource: DeribitIn terms of trading activity, the most active options positions in the past 24 hours have been predominantly bullish (green), targeting the $100,000 and $90,000 price levels. Meanwhile, hedging orders (red) are concentrated at lower levels, such as $84,000 and $70,000.

NguSource: ArkhamAt the same time, data from Amberdata shows that BTC’s recent underperformance is largely related to the weakness in US tech stocks. Greg Magadini from Amberdata commented:

“The slowdown in US tech stocks is most likely a consequence of the global credit tightening wave, especially after Japan raised interest rates. And with that: Credit → US AI Tech → Crypto.”

Magadini believes the recent tech weakness may stem from concerns that Japanese bond yields will continue to rise, creating the risk of another wave of carry trade unwinding. However, he sees this scenario as unlikely.

“Short-term rates are the key variable for carry traders. Currently, overnight rates for the JPY are nearly fixed, while the odds of the Fed cutting rates at the December 10 FOMC meeting are basically a coin toss,” he said.

He added that, given Japan’s excessive public debt, the country is almost unable to aggressively raise short-term rates.

If this assessment proves accurate, the upcoming macro environment could become more favorable for risk assets. This would also provide a crucial tailwind for Bitcoin to continue recovering, aiming for the $90,000 or even $100,000 milestones.

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