Bitcoin drops below $92K as ‘Santa Claus Rally’ hopes fade
Bitcoin (CRYPTO:BTC) fell to its lowest level since late November, dampening expectations for a traditional “Santa Claus rally” this holiday season.
On December 23, Bitcoin dropped to $92,442, its lowest price in four weeks, marking a 14.5% decline from its peak of $108,000 just six days earlier on December 17.
The cryptocurrency briefly rebounded to $95,000 before slipping back to $94,000 during early trading on December 24, showing a 11% decrease over the past week.
Historically, the crypto market has seen a positive boost during the final trading days of December, referred to as the Santa Claus rally.
This trend has occurred eight out of 10 times from 2014 to 2023, according to a CoinGecko study released in mid-December.
The market capitalisation of cryptocurrencies increased by 0.7% to 11.8% during this period.
However, Bitcoin’s lackluster performance this December contrasts with past patterns observed during earlier bull markets.
Notably, in 2016 and 2020 — preceding market cycle peaks — Bitcoin experienced substantial gains during the last trading days of December.
A key difference is that 2021 marked the peak of the previous market cycle, leading to a decline rather than an uptick through the holiday period.
In 2021, Bitcoin fell about 26% by Christmas and continued its downward trend throughout 2022.
As the market prepares for increased activity, $18 billion worth of Bitcoin and Ether (CRYPTO:ETH) options contracts are set to expire on December 27, which could introduce volatility.
Bitcoin’s social sentiment also reached a yearly low on December 22, hinting at potential market recovery.
This indicates renewed interest and possible gains as market dynamics shift in the final days of the year.
At the time of reporting, the Bitcoin price was $94,378.86.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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