Bitcoin's price has dropped to its lowest level since late November, dampening hopes for a "Santa Claus rally." This traditional period of strong gains in the lead-up to the new year has historically occurred in years preceding market cycle peaks.
Bitcoin fell to $92,442 on December 23, marking a 14.5% correction from its all-time high of over $108,000 reached on December 17. While it briefly rebounded above $95,000, it has since fallen back to around $94,000, representing an 11% decline over the past week.
Historically, crypto markets have exhibited strong performance during the holiday season, particularly in bull market years. However, Bitcoin's recent dismal December performance has shattered expectations for a Santa Claus rally this year.
Crypto trader Mister Crypto highlighted the significance of past rallies, noting that 2016 and 2020, years preceding market cycle peaks, witnessed substantial gains between Christmas and New Year.
A CoinGecko study supports this observation, showing that from 2014 to 2023, crypto markets experienced a Santa Claus rally in eight out of ten years, with market capitalization increasing between 0.7% and 11.8% during the week of December 27th to January 2nd.
However, 2021, the peak year of the last cycle, saw a stark contrast, with Bitcoin falling 26% from its high of $69,000 by Christmas Day and continuing its downward trajectory throughout 2022.
This year, while 2025 is anticipated to be the peak year of the current cycle, mirroring the four-year pattern observed since Bitcoin's inception, the market is experiencing a different trajectory.
Further volatility is expected on December 27th with the expiration of approximately $18 billion worth of Bitcoin and Ether options contracts.
Interestingly, Bitcoin's social sentiment hit its lowest point this year on December 22nd, which could potentially signal an incoming recovery.
December 2024, Cryptoniteuae