Bitcoin’s Price Drop and the Missing Santa Claus Rally in 2024
Bitcoin has been going through a rough patch lately. With its price falling to $92,442, down 14.5% from its all-time high of $108,000, many are wondering if the much-anticipated “Santa Claus rally” will happen this year. Although Bitcoin has recovered somewhat to around $94,000, it still fell more than 11% last week. So, will the holidays bring the boost we’re hoping for, or is this a sign of things to come?
Santa Claus Rally: Will it happen?
In the past, cryptocurrency markets have tended to perform well during the holidays, especially in the years leading up to market peaks. For example, there were some strong rallies in 2016 and 2020 before cryptocurrency prices hit all-time highs. a study Coin Gecko It was even shown that between 2014 and 2023, the cryptocurrency market rose after Christmas eight out of ten times. On average, market capitalization increased between 0.7% and 11.8% from December 27 to January 2. So it’s natural to expect some cheer from Santa Claus rallies.
But that doesn’t happen every year. For example, in 2021, Bitcoin had fallen by 26% before Christmas and continued to fall in 2022. Even so, many still expect 2025 to be a big year for Bitcoin, following the usual four-year market cycle.
What’s happening now?
While Bitcoin’s price drop isn’t exactly in line with expectations for a Santa Claus rally, there are a few things that could be changing. Around December 27, approximately $18 billion in Bitcoin and Ethereum options contracts will expire. This could lead to some serious volatility that could lead to changes in the price of Bitcoin. Additionally, social sentiment on Bitcoin fell to its lowest point of the year at the end of December. This could mean a recovery is coming.
Judging from past performance, the trend of Bitcoin around Christmas can be described as ups and downs. Some years, it spikes, while other years it dips. If we look at the entire month of December, Bitcoin’s average returns were not bad. On average, betting on the entire month of December is more profitable than betting on just the Santa Claus rally.
what to expect
As the end of 2024 approaches, everyone’s eyes will be on what’s next for Bitcoin. Will it rebound, or continue to struggle? Bitcoin still has hope of surprising us in the final days of December, especially as options contracts expire and market sentiment shifts.
