Bitcoin Price Drop and the Lost Santa Claus Rally in 2024

Bitcoin has had a tough time recently. With its price falling to $92,442, down 14.5% from its all-time high of $108,000, many are wondering if the long-awaited “Santa Claus Rise” will happen this year. While Bitcoin has shown some recovery to around $94,000, it is still down over 11% in the past week. So, will the holiday season bring the boost we’re hoping for or is this a sign of things to come?

Santa Claus Rally: Will he appear?

In the past, cryptocurrency markets have tended to perform well during the holiday season, especially in the years immediately preceding the market peak. For example, 2016 and 2020 saw some strong spikes, before cryptocurrency prices reached all-time highs. Study by Queen Gekko It also shows that between 2014 and 2023, cryptocurrency markets rose after Christmas 8 out of 10 times. On average, market capitalization jumped between 0.7% and 11.8% from December 27 to January 2. So, it’s only natural that people look forward to Santa Claus’ parade in search of some joy.

But not every year it happens this way. In 2021, for example, Bitcoin had already fallen 26% by Christmas Day and continued its decline throughout 2022. However, many still expect 2025 to be a big year for Bitcoin, following the usual four-year market cycle. .

What happens now?

Although Bitcoin’s price drop isn’t quite what people expect from a Santa Claus walk, there are some things coming that could shake things up. Around December 27, approximately $18 billion worth of Bitcoin and Ether options contracts will expire. This could cause some serious volatility, which could lead to a change in the price of Bitcoin. Also, Bitcoin social sentiment fell to its lowest level of the year in late December. This may mean that recovery is on the horizon.

In terms of past performance, Bitcoin’s movements around Christmas were all over the place. Some years, it has risen, while other years have seen a decline. If we look at the month of December as a whole, we find that Bitcoin had a good average return. On average, betting on the entire month of December was more profitable than focusing solely on the March of Santa Claus.

What do you expect

As we approach the end of 2024, everyone’s eyes will be on what’s next for Bitcoin. Will he recover or will he continue to struggle? There is still hope that Bitcoin will surprise us in the final days of December, especially with the expiration of options contracts and a shift in market sentiment.