Will there be a "Christmas market" in December this year?

Author: Jamie Redman, Bitcoin.com; compiler: Song Xue, Golden Finance

After BTC surged more than 10% over the past month and 128% over the past year, the term “Bitcoin Santa Quotes” is gaining popularity on social media platforms like X. This concept reflects the historical “Santa Claus market” in the stock market, where the stock market typically rises between Thanksgiving and Christmas, and the market value of Bitcoin is trending similarly. ** Proponents cite two examples to support this theory.

The first example occurred in late November 2013, when the price of BTC was less than $1,000. In December, the price of Bitcoin climbed steadily, peaking at $1,147 per coin on December 23, 2013. The next rise was during the holiday season in 2017. In late November of that year, Bitcoin was trading at around $8,500.

In December 2017, Bitcoin entered a steep upward trajectory, breaking through $19,000 by mid-December and nearly touching the $20,000 mark for the first time. However, in the bull market ahead of the 2021 holiday season, the pattern changed. On November 10, 2021, the price of BTC reached an all-time high of $69,000, but the price slipped in December due to volatility and reduced holiday trading volumes.

By the end of the year, Bitcoin struggled to maintain a price of $46,000, challenging the notion of the Santa Claus market that year. Bitcoin has been experiencing such a rally for almost six years, but that hasn’t stopped Bitcoin enthusiasts from hoping for another Christmas rally, sparking a heated discussion online. This is confirmed by Google Trends, and this month’s “Bitcoin Santa Claus Quote” has generated a lot of interest.

On November 6, 2023, interest in the term spiked to 92 out of 100 on Google Trends, then suddenly dropped to zero, and then rose back to 80 two days later. The search term dropped to zero again until November 17, when it scored 60. However, on November 20, the query peaked at 100, which is the highest score shown by Google Trends.

Despite the strong interest, the chances of a Bitcoin rally next month may be even more slim. For example, trading volume typically decreases in December as traders turn their attention to holiday celebrations and family time. This pattern, which is well known to bears, has been exploited in particular in 2021. **

In addition, there is growing speculation that any major rally may not materialize until next year, which may be in line with the expected halving event, which also weakens the outlook for Santa’s market. Typically, January is a recovery month for the trading community, as the impact of year-end tax considerations tends to wane as the new year begins. **