Bitcoin has taken a big tumble recently, but don't worry, we all know that around this time every year there's a 'Santa Claus effect'. Who knows, Bitcoin might ride the holiday wave and its price could soar!
That said, history loves to play tricks. Sometimes it rises to make you smile, and other times it drops to make your heart ache. Bitcoin previously skyrocketed to $108,000, and now it has dropped to around $92,000, which is really concerning. Although it has climbed back to $94,000 now, it still experienced a significant drop last week.
With 2024 just around the corner, will Bitcoin continue to be sluggish or make a stunning turnaround? We're all watching closely.
To be honest, the crypto market often surprises us during the holidays, especially in the years leading up to new price highs, like in 2016 and 2020, where the rebounds were impressive! Research from CoinGecko also indicated that in recent years, the market tends to rise after Christmas. So, many people believe that this year Bitcoin can also bounce back thanks to the 'Santa Claus effect'.
However, it's not always that effective. Just look at 2021 and 2022, when Bitcoin suffered a severe drop around Christmas.
Nevertheless, we should think positively, as the Bitcoin market has a four-year cycle. Although prices have fallen, the cyclical pattern still gives us a bit of confidence.
There are a few other things to mention. Around December 27, there will be a large number of Bitcoin and Ethereum options contracts expiring, which could cause more price volatility. Also, by late December, social sentiment for Bitcoin has dropped to its lowest point this year, which could be a sign of a rebound!
The performance of Bitcoin during Christmas is truly unpredictable. But if we look at the entire month of December, Bitcoin's returns are actually quite decent. So, let's not just focus on the 'Santa Claus effect'; we also need to consider the overall returns for December.
As we approach 2024, will Bitcoin continue to be sluggish or make a dramatic comeback? We'll just have to wait and see!
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