Bitcoin fell 12% from its all-time high of $108,353, erasing the gains of the second week of December. With Christmas just around the corner, cryptocurrency traders are pondering whether the market will see a “Santa Claus” rally this year.

A CoinGecko report indicates that eight out of ten times between 2014 and 2023, cryptocurrency markets rose over the Christmas holiday. Bitcoin The recent price decline has crushed hopes for a Santa rally this year, and a decline in institutional investment inflow has dampened sentiment further.

Will Cryptocurrency Markets See a Santa Fe Rally in 2024?

The “Santa Claus” spike refers to cryptocurrency price gains in the last five trading days of the year and the first two trading days of the following year, according to a CoinGecko report. Therefore, the performance of the cryptocurrency market is fundamental during the one-week timeframe from December 27, 2024 to January 2, 2025.

Bitcoin's decline from its all-time high has raised concerns among investors Bitcoin Traders and hopes for a rising Santa Claus have tempered this session. Between 2014 and 2023, cryptocurrency markets surged after Christmas.

Cryptocurrency markets have seen a decline rather than a rise three times out of ten in the past decade with a sharp correction of 12.12% before Christmas, during the 2017 Initial Coin Offering (ICO) bubble.

With Bitcoin hovering around $97,000 on Tuesday, December 24, a pre-Christmas rally seems unlikely. BTC could gain post-Christmas if there is a rebound in institutional interest in the largest cryptocurrency.

The overall market capitalization of cryptocurrencies, excluding Bitcoin, began to recover this week. The daily chart is showing bullish signs that support the hypothesis of gains in altcoins market capitalization, making it likely that altcoins will see a rally after Christmas or during the first two trading days of 2025.

Bitcoin price performance for the fourth quarter of 2024

Quarterly Bitcoin returns data from Coinglass shows gains of more than 50% in Q4 in both 2024 and 2023, as of December 24. It is important to note that the uptrend in 2020, 2017, and 2013 ended with approximately 480%, 215%, and 168% gains in BTC in Q4.

Bitcoin's performance this quarter has been lackluster, and there is little evidence to support extended gains in the first two trading days of 2025. Institutional interest in Bitcoin is slowing, reducing capital inflows, and this is evident from the net outflows of Bitcoin spot ETFs.

With Bitcoin's Q4 performance below average of 54.80%, the token is unlikely to retest its all-time high before the end of the year.

Top 50 performing altcoins

The Altcoin Season Index on Blockchaincenter.net helps evaluate the performance of the top 50 altcoins over a 90-day period.

The index reads 49 on a scale of 0 to 100, meaning that the price performance of the top 50 altcoins lags when compared to Bitcoin's return to their holders in the same time period.

While 49 means that it is not altcoin season yet, it shows that nearly 50% of altcoins have outperformed Bitcoin in the past 90 days.

The influence of Trump, South Korea and Asia influence this cycle

Bitcoin prices continue to fall, even as US President-elect Donald Trump appoints a third pro-crypto candidate. Trump nominated Stephen Meiran to head his Council of Economic Advisers. Miran is a well-known crypto advocate, another pro-crypto appointment made by the incoming president.

Previously, Trump appointed pro-crypto candidate Paul Atkins to head the Securities and Exchange Commission, and technology investor David Sachs to serve as AI and cryptocurrency official. While these appointments are expected to guide cryptocurrencies towards positive regulation in the US, the price of Bitcoin continues to decline.

Data from Statista shows that South Korea is estimated to be the third largest cryptocurrency market in the world and exchanges in Korea account for more than 9% of global trade volume as of 2021. The Korean won ranks among the top 5 currencies traded against Bitcoin, according to the data.

South Korea postponed taxation of cryptocurrencies until 2027 and adopted a pro-crypto approach, paving the way for positive developments in Asia and for Bitcoin traders in Korea.

MicroStrategy's scheme led by Michael Saylor to keep bitcoin on its balance sheet has inspired a wave of adoption across Asia. According to an Asia Express report, Chinese selfie app developer Meitu invested 31,000 ETH and 940 BTC in spring 2021. Japanese company Metaplanet has been accumulating BTC during the dips and now owns 1,142 BTC, as of December 19.

With large companies adding Bitcoin to their balance sheets, Asia is focusing this cycle on driving Bitcoin adoption and institutionalization.

Key levels to watch during the holidays

Bitcoin derivatives traders appear to be bullish on Bitcoin gains across exchanges such as Binance, OKX, and Deribit. The buy/sell ratio exceeds 1 across exchanges and BTC has observed a significant rise in open interest, indicating increased suitability and demand among traders.

Over $38 million worth of short positions on Bitcoin were liquidated in the past 24 hours, with bullish sentiment taking over.

Key levels to monitor during the holidays:

• Support at $89,376 and $92,500: A daily candlestick close below $89,376 could break down key support levels and indicate that sellers are willing to pull Bitcoin back to the lower limit of the imbalance zone on the weekly price chart at $81,500. This could lead to cascading liquidations and a sharp sell-off in cryptocurrencies.
• Resistance at $100,000: A daily candlestick close above this level would return the new all-time high above $108,000 as a target. BTC could extend its gains and retest its all-time high, marking the top of the cycle.

Regardless of the current sentiment among traders, Bitcoin remains highly volatile, and key levels provide guidance as traders navigate holiday-induced volatility in the cryptocurrency market.