Bitcoin’s drop to its lowest price in over four weeks on December 23 has dashed expectations for a classic “Santa Claus rally.” The world’s largest cryptocurrency fell to $92,442, a steep 14.5% drop from its December 17 peak of $108,000, before briefly recovering to $95,000 and then dipping again. According to Crypto trader Mister Crypto, the historical trend of strong December rallies, like those seen in 2016 and 2020, typically occurs before market peaks. But this time, Bitcoin’s performance seems to be bucking tradition.
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Santa Claus Rally May Not Arrive This Year
The December slump comes as Bitcoin continues to struggle, down over 11% in the past week. Historically, crypto markets have performed well during the festive season, especially in years leading up to market cycle peaks. A study from CoinGecko revealed that crypto markets have enjoyed a Santa Claus rally 80% of the time from 2014 to 2023, with market caps rising between 0.7% and 11.8% during the final days of December. However, with Bitcoin’s recent dip and poor sentiment, hopes for a rally this year have almost completely faded.
The key difference between this year and 2021’s lackluster December is that 2021 marked the peak of its cycle. Now, experts are eyeing 2025 as the expected peak, based on Bitcoin’s historical four-year cycle. According to Cointelegraph, volatility could spike on December 27 when a massive $18 billion in Bitcoin and Ethereum options contracts expire, potentially adding more uncertainty to the markets.
At the time of writing, Bitcoin is sitting at $94,191.47.
