Bitcoin ‘Santa Claus Rally’ expected to drop price to December low
Bitcoin fell to its lowest price since late November, dashing hopes for a “Santa Claus rally” that has historically delivered solid gains during the holiday season in years before market cycles peak.
Bitcoin (BTC) fell to a four-week low of $92,442 in late trading on December 23, a 14.5% correction from its all-time high of just over $108,000 on December 17.
It briefly bounced back to $95,000, then fell back to $94,000 in early trading on December 24 and currently remains down more than 11% over the past week.
Cryptocurrency markets have historically performed well during the festive period of bull markets, but Bitcoin’s dismal December performance dashed hopes for a so-called Santa Claus rally. january.
However, cryptocurrency trader ‘Mister Crypto’ compared Bitcoin’s performance in previous years and pointed out that there were large rallies between Christmas and New Year in 2016 and 2020 before the market cycle peaked.
Cryptocurrency market performance in previous cycles. source: Mr. Crypto
According to a CoinGecko study published on December 13, from 2014 to 2023, cryptocurrency markets experienced a Santa Claus rally eight out of 10 times after Christmas, with the total cryptocurrency market capitalization increasing over a one-week period from 2014 to 2023. It jumped from 0.7% to 11.8%. From December 27th to January 2nd.
In past years, Santa Claus has held rallies. source: stagnant gecko
There has been no Santa Claus rally since the 2021 cycle peak, as BTC fell about 26% from its high of $69,000 by Christmas Day and continued to decline throughout 2022.
The difference is that while 2021 was the peak year of the cycle, 2025 is expected to be the peak year of this cycle, following the four-year pattern that Bitcoin has played out since its inception.
relevant: The December market correction reduced cryptocurrency ETPs by $17 billion.
Cryptocurrency markets could see increased volatility on December 27, when about $18 billion worth of Bitcoin and Ethereum (ETH) options contracts expire.
Bitcoin social sentiment hit its lowest point on December 22nd of this year, which could indicate a recovery on the horizon.
magazine: BTC correction is ‘almost complete,’ says Haliey Welch. Etc.: Hodler’s Digest
