Based on available data, the Bitcoin Santa Claus rally appears unlikely to happen this year as the price of the crypto has fallen to its lowest since November. The seasonal phenomenon where prices surge from Christmas to early January seems to be losing steam as Bitcoin fails to bounce back strongly after a big drop.

The cryptocurrency fell to $92,442 on December 23; down 14.5% from the December high of over $108,000. It briefly got back to $95,000; but is now at $94,000, down over 11% on the week.
December’s Dismal Performance 
Historically, Bitcoin and the crypto market have rallied during the holiday season, especially in years leading up to market cycle peaks. For example, Major rallies between Christmas and New Year were the precursor to the 2016 and 2020 bull runs.
The post-Christmas gains happened 8 out of 10 times from 2014 to 2023, between December 27 and January 2, according to reports, with gains from 0.7% to 11.8%.
However, 2021 was an exception: Bitcoin fell 26% from its November peak of $69,000 by Christmas and continued to decline into 2022. The current market downturn raises the question if 2025 – expected to be the next cycle peak year – will follow the traditional 4-year cycle since Bitcoin’s inception.
Drivers Behind Bitcoin’s Decline
Several factors are contributing to Bitcoin’s poor performance this December: Social sentiment for Bitcoin is at a 2024 low on December 22, according to market analytics. Negative sentiment often precedes a price recovery, but for now, it’s just general caution.
The lingering economic uncertainties like inflation and global monetary policies are also weighing investor confidence. Additionally, the correlation with traditional markets has dampened  Bitcoin’s potential to move independently.
Again, approximately $18 billion worth of options contracts in Bitcoin and Ether are allegedly expiring on December 27. This kind of event creates very volatile markets as traders rebalance their positions. This can push prices even lower.

Bitcoin Santa Claus Rally Fades As December Slump Continues
Historical Context: Bitcoin Santa Claus Rally Trends
The so-called Bitcoin Santa Claus rally is the seasonal phenomenon where markets (in this case, cryptocurrencies included) tend to rise during the last 5 trading days of December up to the first 2 trading days of January. In bull market years during such a period, in 2016 and 2020, for example, some of the gains were partly due to increased retail and institutional participation in Bitcoin and other assets.
After those peaks, the rally potential has diminished. Not having one in 2021 and the subsequent 2022 bear market only reinforces this point.
Market analysts said the Santa Claus rally is not a guarantee but generally means more optimism in the overall market.
Bitcoin and Crypto Market Outlook
Though facing a tough time, there’s still hope in the market dynamics of Bitcoin: Most investors still believe 2025 is a peak cycle year due to historical trends and Bitcoin’s halving.
Due to options expiry, this volatility can bring bigger price movements, which can be good for short-term traders. Short-term gains may not be possible, but the long-term outlook for Bitcoin is strong with institutional adoption. However,  sustained bearish momentum backed by current technicals suggests Bitcoin may still be under pressure in the short term.
Conclusion
December’s poor performance has dampened the Bitcoin Santa Claus rally hopes for this year which is opposite to the past festive season surges. Prices reached 4 week low, and market sentiment is still subdued, making it seemingly hard for the cryptocurrency to end the year on a high note.
Though Bitcoin may be volatile in the short term as traders position themselves ahead of options expiries, the long-term outlook remains optimistic since 2025 is expected to be a peak cycle year.
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FAQs
1. What exactly is the Santa Claus rally for cryptocurrency markets?
A Santa Claus rally is a phenomenon that extends from around the last 5 selling days of December and carries over until the first 2 days of trading in January, when prices of markets together with that of cryptocurrency-gen, typically rise.
2. Why is it that Bitcoin does not have a Christmas rally for this year?
Chances of a Christmas rally this specific year are dim as lowered market sentiment and options expiry coupled with macroeconomic issues have dampened this month’s possibilities for Bitcoin to stage a rally.
3. Has there ever been a Santa Claus Rally in Bitcoin?
Yes, during 8 out of 10 Christmas seasons, BTC’s rally has been characterized especially by those years marked by a bull run such as 2016 and 2020.
4. What may trigger the price rally of Bitcoin?
Increased adoption by institutions, expectations around the peak in 2025, and options expiration events may contribute to such a move.

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Bitcoin price has had a strong performance this year as it jumped by 120%, beating popular assets like the Nasdaq 100 and the S&P 500 indices. 
Bitcoin (BTC) has retreated to $97,000 from the all-time high of $108,427 after the Federal Reserve pointed to just two interest rate cuts in 2025.
MVRV score shows Bitcoin price is still cheap
The recent Bitcoin pullback affected investors, as evidenced by spot ETF flows.
According to SoSoValue, these funds had net outflows of $276 million on Friday, a day after they shed $680 million in assets. That was a sign that some investors believe that Bitcoin may have topped.
Still, the Market Value to Realized Value indicator hints that Bitcoin price is still cheap even after moving to a record high last week.
According to CoinGlass, the MVRV-Z score has dropped to 2.84 from last week’s high of 3.3. Historically, an MVRV-Z score figure below 3.7 is a sign that an asset is undervalued. 

Bitcoin MVRV indicator | Source: Coinglass
The MVRV-Z score is an important indicator that looks at the market value and the relative value of a coin. It is calculated by subtracting the realized market capitalization from the circulation market value and then dividing the figure by the standard deviation. 
Bitcoin had an MVRV score of 3.03 in the last big correction in March this year, and 7 in the previous major correction in January 2021. 
Therefore, this score is a sign that the coin could recover strongly in the next few weeks. As we wrote in a recent BTC forecast, the cup and handle pattern points to a rally to $122,000 in this bullish cycle.

BTC faces other strong fundamentals
The coin also has some strong fundamentals. As shown below, the number of Bitcoins in circulation has dropped to a multi-year low of 2.24 million. There were over 2.72 million coins in exchanges in September this year. 
That indicates that more investors are buying and storing Bitcoins in self-custody wallets. Some of these investors are those accumulating ETFs, which now have over $109 billion in assets. Companies like Marathon Digital and MicroStrategy have also continued to accumulate Bitcoins this year.
MicroStrategy now holds over 439,000 coins.

Bitcoin balances on exchanges | Source: CoinGlass
The other potential catalyst for Bitcoin is that the stablecoin market cap has jumped to almost $210 billion, up from $122 billion a year earlier.
A rise in stablecoin value is usually a positive indication, underscoring how more investors are showing interest in cryptocurrencies.
Meanwhile, Bitcoin’s annual inflation rate has continued falling, moving to 1.12% from the 2015 high of almost 12%. This inflation rate has fallen because of the halving events and the rising mining difficulty rate. 

Bitcoin annual inflation rate | Source: IntoTheBlock
Therefore, while more Bitcoin pullback is possible, there are signs that its favorable MVRV score and strong fundamentals will help to push it higher in the longer term.

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As of December 20, 2024, the global cryptocurrency market capitalization stands at $3.52 trillion, reflecting a decline of 3.60% over the past 24 hours, according to CoinMarketCap. Bitcoin (BTC) has fluctuated between $95,007 and $102,800 in the last day, with its current price sitting at $95,159, marking a 6.36% drop. Most major cryptocurrencies are following a downward trend, although select altcoins have managed to outperform the market. Notable gainers include STRAX, ZEN, and CTXC, which have seen increases of 30%, 14%, and 6%, respectively.

Among the top news stories today, Bitcoin dominance continues to decline as some altcoins gain more traction. El Salvador has made a strategic move by increasing its Bitcoin reserves with an additional $1 million purchase. Meanwhile, Bitcoin and Ethereum ETFs are anticipated to drive crypto fund launches in the U.S. in 2025, and Grayscale has opened the Sui Trust to accredited investors. Additionally, market participants are keeping a close eye on developments with Solana (SOL) and Ethereum (ETH) as both face price fluctuations and network changes.

The market has been challenging for many top cryptocurrencies, with Ethereum (ETH) seeing a 10.49% drop to $3,289.45, and Dogecoin (DOGE) falling by 18.06%. Solana (SOL) also faced a significant downturn of 12.39%. However, the market’s recent underperformance has highlighted some interesting shifts in altcoin trends, providing traders with opportunities to explore. Notably, STRAX, ZEN, and CTXC have stood out as top gainers on Binance, offering a refreshing contrast to the broader market decline.

In summary, despite the overall bearish sentiment across most major coins, the market is seeing bursts of opportunity in select tokens, making it essential for traders to stay vigilant and strategic in their approach. With Bitcoin and Ethereum ETFs on the horizon and potential changes in regulatory landscapes, there’s much to anticipate for the year ahead.

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Financial markets experienced a major shock following an unexpected statement by Federal Reserve Chairman Jerome Powell regarding the outlook for monetary policy in 2025. Despite the recent third consecutive cut to the key interest rate, his cautious forecast about further easing of monetary policy triggered a massive sell-off in the markets.

Investor reaction was immediate: the S&P 500 index dropped by 3%, while the yield on 10-year Treasury bonds reached its highest level in the past seven months. Such a sharp drop in the stock market on the day of a Fed meeting had not been seen since September 2001, when the index fell by nearly 5%.
The situation is further complicated by the anticipated return of Donald Trump to the White House. His promises to raise tariffs on U.S. trading partners and lower taxes could exacerbate inflationary pressures, significantly increasing uncertainty for market participants.
High-risk assets were the most sensitive to the change in sentiment. Goldman Sachs’ index of the most heavily shorted stocks fell by 4.9%, while the measure of loss-making tech companies declined by 6.4%—the largest drop in two years. Tesla shares lost 8.3% of their value, and Bitcoin, which had recently approached the $108,000 mark, dropped by 5%.

Experts note that the market was unprepared for this turn of events. According to Tom di Galoma of Curvature Securities, the Fed is shifting to a more neutral stance as it awaits further actions from the new administration. Current forecasts suggest fewer than two rate cuts of a quarter percentage point each throughout 2025, a scenario even more conservative than what the Fed’s official projections indicate.

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