The Cryptocurrency Test of Christmas: Sell Coins for the Holidays or Buy on Dips?

Christmas in the cryptocurrency world seems to always carry a hint of 'disaster.' Every year, as the Christmas holiday approaches, the market often experiences a wave of 'pre-holiday plummets,' leaving investors both hopeful and anxious. So, will Bitcoin once again confirm this 'curse' before Christmas this year?

The Reasons Behind the Christmas Curse

1. Reduced Liquidity: Investors in Europe and the United States typically reduce trading during holidays, leading to insufficient market liquidity and increased volatility.

2. Year-End Fund Recovery: Many institutions and investors sell off some crypto assets at year-end to recover funds and realize profits, which may create short-term selling pressure in the market.

3. Emotional Speculation: Since 'pre-holiday plummets' have become an expectation, many investors act in advance, amplifying the selling effect.

Historical Trend Reference

In the past few years, Bitcoin has indeed experienced several noticeable corrections before Christmas:

• 2021: The week before Christmas, Bitcoin dropped from $51,000 to $46,000, a nearly 10% decline.

• 2022: Similarly, in the week before Christmas, Bitcoin fell from $18,300 to $16,800.

However, there have been some years, such as 2020, when Bitcoin steadily rose before Christmas and quickly surged after. Therefore, the 'Christmas curse' does not hold true every year, but the historical pattern is still worth noting.

Will it hold true this year?

• Current market sentiment is somewhat optimistic, but year-end financial pressure and macroeconomic uncertainties may still trigger short-term volatility.

• The critical support level for Bitcoin is around $33,000; if it falls below this, it may trigger more selling.

• Altcoins are significantly affected by Bitcoin's movements, with higher correction risks.

Response Strategy

1. Rationally Reduce Holdings: If holding high profits, consider moderately reducing positions to lock in gains.

2. Set Stop-Losses: Invest cautiously to avoid excessive losses due to sudden declines.

3. Patiently Wait: Even in the event of a significant drop, the market often presents recovery opportunities after the holidays; do not rush to chase highs or sell low.

Conclusion:

The Christmas market always brings mixed feelings, but short-term volatility does not change the long-term trend. Cautious operations and rational judgments may be the best 'gift' this Christmas. Sell before the holidays or pick up bargains? The answer from the market ultimately is the cycle of time.