🚀 Bitcoin Boom & ☃️ Santa Rally: What’s Ahead for Prop and Futures Traders?

Hey there! Thanks for checking back in with The Trading Brief, week 48 is here and it is time to gear up for the historical Santa rally! Enjoy your brief! 😀

Table of Contents

1. Bitcoin Boom & Santa Rally

2. Prop Firm Deals

3. Important Data Events

4. Trading Levels - Week of 11/25

NEWS
🚀 Bitcoin Boom & ☃️ Santa Rally: What’s Ahead for Prop and Futures Traders?

If there’s one thing traders love, it’s volatility—and Bitcoin has been delivering it in spades! The cryptocurrency recently broke past the $40,000 mark, setting off fireworks in the markets and fueling speculation about what’s next. For professional prop traders and futures traders, Bitcoin’s boom presents a mix of thrilling opportunities and nail-biting risks. And as December approaches, we also have the “Santa Rally” in traditional markets to look forward to. Let’s explore what these phenomena mean for the trading community, with a touch of fun along the way.

Bitcoin Boom: The Rollercoaster Returns

Bitcoin’s latest rally has sparked fresh optimism across markets. Institutional adoption continues to grow, with big names like BlackRock pushing for Bitcoin ETFs and global uncertainties driving interest in the “digital gold” narrative. Prop traders, who thrive on quick pivots and calculated risks, are reveling in the extreme price swings.

“Bitcoin isn’t just volatile; it’s hyper-volatile. That’s both a trader’s dream and a risk manager’s nightmare,” says Jamie Chen, a senior trader at a prop firm in New York.

For futures traders, the surge in Bitcoin derivatives activity is impossible to ignore. Open interest in Bitcoin futures has climbed steadily, and options markets are buzzing with activity as traders position themselves for the next big move.

By the Numbers

• Bitcoin futures volumes on the CME jumped 20% in October, reaching a six-month high. (Source: CME Group)

• Total crypto derivatives trading hit $2.7 trillion last month, up 35% from the previous quarter. (Source: The Block)

Despite these opportunities, traders must tread carefully. Crypto markets are notorious for their weekend gaps and sudden reversals. It’s a game of agility and discipline.

The Santa Rally: Myth, Magic, or Market Phenomenon?

While Bitcoin grabs headlines, traditional markets are preparing for the holiday classic: the Santa Rally. This phenomenon refers to the stock market’s tendency to rise in the final five trading days of December and the first two of January. According to the Stock Trader’s Almanac, this rally has occurred about 75% of the time since 1950.

Why does it happen?

• Tax strategies: Investors sell losing positions for tax benefits, then reinvest before the new year.

• Optimism: Holiday cheer and year-end bonuses boost market sentiment.

• Fund manager window dressing: Institutions rebalance portfolios to showcase strong performers.

“The Santa Rally isn’t guaranteed, but it’s a gift when it shows up,” jokes Sarah Lopez, a futures trader specializing in seasonal trends. “It’s like finding cash in your old winter coat—you’re thrilled, but you can’t count on it every year.”

Past Performance and This Year’s Outlook

Historically, the S&P 500 has delivered average returns of 1.3% during the Santa Rally period. Last year, despite broader market turbulence, the index gained 0.9% during this window.

This year, optimism is mixed. Cooling inflation and a potential pause in interest rate hikes create a favorable backdrop, but geopolitical tensions and recession fears may temper the cheer.

Strategic Tips for Traders

1. Embrace Volatility: Whether it’s Bitcoin’s unpredictable swings or the Santa Rally’s gentle upward drift, be ready to adapt quickly.

2. Watch Correlations: Bitcoin’s recent moves may influence broader risk sentiment, spilling over into equity and commodity markets.

3. Plan for Seasonality: In traditional markets, retail and tech sectors often outperform during the Santa Rally. For Bitcoin, monitor key resistance levels as traders square their books for the year.

Pro Tip: Use hedging strategies to manage risk during high-volatility periods. As Jamie Chen puts it: “In these markets, staying in the game is half the battle.”

Closing Thoughts

The end of the year promises excitement for traders across the board. Bitcoin’s boom offers unparalleled opportunities for the brave, while the Santa Rally could provide a steady tailwind for equities. Just remember: trading is as much about managing risks as it is about seizing opportunities.

Or, as Sarah Lopez wittily sums it up: “The markets are like holiday dinners. Sometimes they’re perfect, and other times you just hope to get through without a food fight.”

PROPRIETARY FIRMS
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These are the firms that we currently recommend, this list is updated weekly!

EVENTS
Important Data Events - Week 48

Monday, November 25

Tuesday, November 26

Wednesday, November 27

Thursday, November 28 - Happy Thanksgiving!

Friday, November 29

WEEKLY TRADING LEVELS
FUTURES INDICIES

Enjoy this list of levels that have been curated for you! These levels are some major support and resistance levels that have been identified as areas of interest.

Use them to guide your charting, happy trading! ☘️