Bitcoin has experienced a significant decline, reaching its lowest price since late November and casting doubt on expectations for a holiday price surge often referred to as a “Santa Claus rally.” This rally typically brings notable gains during the festive period, particularly in years leading up to market peaks.
On December 23, Bitcoin (BTC) dropped to $92,442, reflecting a 14.5% decrease from its all-time high of approximately $108,000 reached just days earlier on December 17, according to . Although it made a slight recovery to briefly trade above $95,000, it ultimately settled around $94,000, marking an over 11% decline in the past week.
Historically, the cryptocurrency market has fared well during the holiday season, especially during bullish trends. However, Bitcoin ’s lackluster performance in December has diminished prospects for any last-minute surge known as a Santa Claus rally—a phenomenon characterized by price increases during the final five trading days of December and the first two days of January.
Past analysis from earlier years shows that Bitcoin experienced significant gains during this period in 2016 and 2020, just before reaching market cycle peaks. From 2014 to 2023, a study indicated that 80% of the time, the cryptocurrency market has seen a Santa Claus rally, with total market capitalization rising between 0.7% and 11.8% in the week following Christmas.
The situation differs from 2021, when Bitcoin ’s price had already fallen significantly by Christmas, leading to a prolonged downturn throughout the following year. Currently, while 2025 is predicted to be the next market peak year in Bitcoin ’s recurring cycle, traders remain cautious.
Volatility could return to the crypto markets on December 27, coinciding with the expiration of approximately $18 billion in Bitcoin and Ether options contracts. A significant drop in Bitcoin ’s social sentiment was noted on December 22, which may indicate a potential market recovery.
