Bitcoin Santa Claus Rally Fades as December Prices Plunge

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.

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