In a departure from historical trends, the US stock market and cryptocurrency prices failed to experience the typical “Santa rally” during the Christmas holiday season. Despite a brief rally on Christmas Eve and Christmas Day, the Nasdaq Composite and Bitcoin’s price ultimately declined, with Bitcoin’s price down over 2% for the week.
A Non-Traditional Holiday Season
Historically, the US stock market has seen a boost during the holiday season, with stocks rising in 4 out of every 5 Christmas holidays since 1950. However, this year’s market activity was marked by a lack of enthusiasm, with many assets experiencing a decline in value.
Cryptocurrency Market Performance
While some cryptocurrencies, such as BNB, Solana, and Toncoin, saw significant gains, others, including Bitcoin, Ethereum, and Fantom, experienced declines. Bitcoin’s price was down over 2% for the week, despite a brief rally on Christmas Eve and Christmas Day. Ethereum managed to eke out a 1.5% daily gain, but its overall performance was lackluster.
Factors Contributing to the Decline
Several factors may have contributed to the decline in cryptocurrency and stock prices, including steep valuations going into the holiday season and a Bitcoin miner selloff amid rising energy prices. Additionally, the tech stock slump may have had a negative impact on the average exchange rate of major cryptocurrencies.
Correlation Between Crypto and Stocks
The correlation between Bitcoin and Nasdaq stocks has been rising since July, with the two assets moving in sync over 70% of the time. This correlation may have contributed to the decline in cryptocurrency prices, as the tech stock slump dragged down the overall market.
A Cautionary Note
While the holiday season has been lackluster for cryptocurrency and stock prices, it’s essential to remember that the market can be unpredictable, and there are still three days left in the year for prices to move. As with any market, it’s crucial to stay informed and adapt to changing conditions.
Source: Cryptopotato.com
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