With families coming together on these holidays and the traditional exchanges closing on Christmas Eve, the crypto market gets a unique opportunity to flourish on a battlefield that offers a resistance-less victory. During these holidays, we can witness many phenomena in the crypto market including the “Santa Claus Rally”. This article will delve more into these phenomena and discuss what will happen with cryptocurrencies during these volatile times.
Impact Of Festive Holidays: The Santa Claus Rally
During Christmas, most of the traditional exchanges get closed, which results in a huge advantage for the crypto market. This phenomenon is referred to as the “Santa Claus rally”. Amid this phase, most cryptocurrencies including Bitcoin can surge by a great degree. However, this rally is greatly influenced by a lot of factors in the economy as well as the opinions of the overall community.
Based on these factors, this pattern can vary significantly and can sometimes even lead to a bearish trend in the market. For instance, in 2019 and 2020, there was a significant price increase in cryptocurrencies. But at the same time, there was a notable decline in the market value of these coins during 2021 and 2022.
2023 Trend & Market Performance
In 2023, we saw a significant increase in the price of various cryptocurrencies especially during the holiday season. It also saw the comeback of many prominent cryptocurrencies like BTC. As of December 2023, BTC has surged over 100% from its dip during the 2022. The main factor that contributed to this surge was the Bitcoin halving that took place in April 2024.
The various regulatory rules and regimes adopted in favor of various crypto coins and ETFs have significantly contributed to this overall growth. During the last phase of 2023 and the opening of 2024, the crypto market has soared from a market value of $1.4 trillion to a high of $1.97 trillion, which was recorded in February of 2024.
Factors Influencing Crypto Price During Year-End
Many factors could potentially influence the price of a coin during the festive season, especially if the said festive season is referring to Christmas and New Year. Some of these factors are as listed as follows.
1. Requirement Of Money
During the festive seasons, people likely require a lot of money. It could be for some decoration or setting a family dinner. This need could lead to a lot of outflows from the crypto market as the users convert their cryptos into fiat currencies.
2. Tax Implications
As the New Year approaches, many traders check their taxes and adjust their portfolios. This adjustment can sometimes lead to increased trading activity with people selling and buying cryptos to adjust their tax amount.
3. Trump’s Ascension
It was made public that Trump will be taking charge of the office on January 20. During this period, it is expected that various cryptocurrencies in the market especially BTC will rise in the market.
4. Holiday Investing
Holiday investing is a phenomenon in which capital investment by traders increases drastically due to a bullish market sentiment. Based on the data from the past two months, the market is currently in a bullish trend, which means we could see an increase in trading activity during this holiday season.
Potential Trend During This Year’s Xmas & New Year
As 2024 comes to an end, the crypto market is soaring higher than ever with a total market cap of $3.27 trillion (at the time of the article’s writing). 2024 marked an overall positive year for the crypto market especially with Trump emerging victorious in the US Presidential Election. With this development, many coins have gone on a bullish run. This bullish trend in the crypto market is expected to continue towards the next year.
With Bitcoin’s global influence and industrial adoption increasing exponentially, it is looking extremely promising for the original cryptocurrency. This may even boost the ongoing altcoin season in the upcoming weeks. There are also factors like liquidity and market volatility that need to be taken into account when determining the direction the cryptos may go. As of now, we can only wait and see what unfolds in the crypto market during the upcoming weeks.
