Bitcoin is trading near $105,000 after a 3% decline in November, prompting traders to look toward December for a potential year-end recovery. Historically, the final month of the year has been favorable for the leading cryptocurrency, a pattern often called the “Santa Claus Rally.”

According to data from Coinglass, Bitcoin has finished six of the past eight Decembers with positive returns, with gains ranging from 8% to 46%. This seasonal trend is often attributed to year-end optimism and lighter holiday trading volumes, which can amplify price movements. Analysts note that traders frequently shift from selling to accumulation as they position themselves for the new year, influencing liquidity across the digital asset market.

Potential Economic Catalysts

Adding to market speculation, President Trump recently proposed a new stimulus measure in the form of a $2,000 tariff dividend check for Americans. He also suggested the introduction of 50-year mortgages to improve housing affordability. Augustine Fan of SignalPlus noted that these proposals, particularly the tariff dividends, echo the direct stimulus checks distributed during the COVID era.

Fan suggests that both measures represent new forms of liquidity easing that could benefit risk assets like Bitcoin. Nick Ruck from LVRG Research added that long-term holders have shifted from panic selling to strategic buying, believing that potential Federal Reserve rate cuts and increased institutional adoption could further fuel a price increase through December.

Conflicting Market Dynamics

Despite the optimistic outlook, current market activity presents a more complex picture. Strategy Inc. recently purchased an additional 487 Bitcoin, bringing its total holdings to 641,692 coins, yet the acquisition had little impact on the price. The company’s stock has fallen 20.4% in 2025, partly due to investor concerns over its high premium compared to its actual Bitcoin holdings. Short seller Jim Chanos recently closed his position against Strategy Inc. after this premium dropped from 2.50 to 1.23 times the value of its assets.

On-chain data reveals a divergence in investor behavior. Large-scale investors, or “whales,” holding over 10,000 BTC have been net sellers for three consecutive months. In contrast, smaller investors with fewer than 1,000 BTC have continued to accumulate, absorbing some of the selling pressure.

Looking ahead, Rachel Lin of SynFutures predicts that Bitcoin volatility will remain high in 2026, driven more by institutional flows and liquidity conditions than by retail speculation. With Bitcoin showing a strong correlation to U.S. liquidity indicators, any pause in monetary easing by central banks could trigger rapid price swings.

As of Tuesday, Bitcoin was trading at $105,355, reflecting a 0.7% decline. Other major cryptocurrencies also saw losses, with Ether down 1.6% to $3,549 and both Solana and Cardano losing over 1%. XRP was a notable exception, rising 0.9% to $2.47.

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