Where does the term come from? 👇🏻


It originated back in the mid-20th century as a metaphorical description of seasonal growth in stock markets at the end of the year.


It is still not precisely known who introduced this term into common usage, but its popularization is associated with analyses of seasonal trends on Wall Street. Analysts noticed a pattern of growth during the period between Christmas (December 25) and the first days of the new year, which became the subject of research and speculation.

Since then, the term has become widely used to describe market trends not only in stocks but also in other assets, including cryptocurrency.

Main reasons for the Santa Claus rally:

1⃣ By the end of the year, events conclude for which investors receive bonuses, money — they can invest it in the market, increasing demand.

2⃣ Investors often close losing positions in December to minimize their taxable base and then open new ones in January.

3⃣ Some start buying assets in anticipation of January growth, creating additional pressure on demand.


Rally in crypto

In crypto, the Santa Claus rally can also manifest, although its mechanism of action differs.


Factors influencing:

• Increased interest from retail investors, who become active during the holiday season.

• The popularization of crypto as a gift or its use as payment.

Should we expect a rally every year?

Markets depend on a multitude of factors. And of course, it's impossible to assert this 100%))

In some years, the rally may not occur or may be less pronounced.

Statistics on the 'Santa Claus rally' for the last 5 years

Stock market (S&P 500 index):

• 2022-2023: The index rose by 4.98% from December 20, 2022, to January 4, 2023.

• 2021-2022: An increase of 1.3% in the last week of December and the first two days of January, which corresponds to the long-term average.

• 2020-2021: Growth of 2.43% from early December 2020 to early January 2021.

• 2019-2020: Moderate growth, coinciding with typical results for this period.

• 2018-2019: A significant jump of 6.2%, associated with recovery from the worst December since 1931.

Historically, the 'Santa Claus rally' has been observed in about 67% of cases since 1950. Stronger rallies often occur in bear markets or economic downturns.


How Bitcoin behaves during the rally:

For Bitcoin, similar seasonal trends are also observed, but with high volatility. For example:

• 2022-2023: BTC showed moderate growth of about 5% during the New Year period.

• 2021-2022: The market remained unstable, with a slight gain of about 2-3% at the end of December.

• 2020-2021: BTC increased by more than 10%, which coincided with a sharp rise in interest in crypto.