As a seasoned researcher with over three decades of experience in financial markets, I have witnessed the Santa Claus rally many times, but this year, it seems that the Grinch has snatched away the holiday spirit from stocks and cryptocurrencies. Having closely monitored market trends since the 1980s, I can say with confidence that valuations were already high going into the holidays, and the ebullient Trump bump since November 5 added fuel to the fire.
The Bitcoin miner selloff amid rising energy prices has been a significant factor in this year’s downturn, but the tech stock slump may also be playing a role in dragging down the average exchange rate of major cryptocurrencies. The BTC Pearson 30-day correlation to Nasdaq stocks has been rising since July and is now over 70% of the time.
However, as they say, “it isn’t over until it’s over,” and there are still three days left in the year to see which way markets move next. In my experience, market trends can be unpredictable and full of surprises, so I will continue to closely monitor developments and adjust my strategies accordingly.
On a lighter note, as we head into the new year, let’s hope that the market doesn’t pull another “Grinch” move on us again! Instead, may it bring us a “Santa Claus” rally and plenty of green candles in our portfolios! Happy New Year!
Over the past seven decades, from 1950 onwards, it’s been observed that U.S. stocks tend to increase in value during four out of every five Christmas seasons. This is because investors often invest their additional savings into the capital markets during this period. However, it’s important to note that financial markets don’t experience this boost each year.
As someone who has closely observed the stock market and cryptocurrency trends for years, I have seen my fair share of Christmas rallies that have ended abruptly due to unexpected pullbacks. This year, just like in the past, the Nasdaq Composite and Bitcoin’s price surged on Christmas Eve and Christmas Day, fueling excitement among investors. However, as we head into the latter half of the week, a sudden pullback seems to be looming, threatening to dampen what was shaping up to be a strong Santa rally. Based on my experience, I would advise caution and careful monitoring of market trends during this critical period.
Santa Claus No Show For Stocks, Crypto
As an analyst, I observed that by noon on a Sunday in San Francisco, Bitcoin’s price had dipped more than 2% over the past week. This decrease occurred even though it had managed to increment by 0.8% within the previous day’s trading session. Notably, the 24-hour trading volume showed a significant decrease.
During a rather sluggish week, Ethereum managed to increase by approximately 1.5% in its daily candle primarily due to market price increases on Friday and Saturday. While Christmas spirit seemed somewhat scarce overall, Binance Coin (up by 11.5% over the past seven days), Solana (+8%) and Toncoin (+11%) all saw notable gains.
However, following a festive overindulgence in eggnog in late December, prices for Fantom (FTM), Etherena (ENA), and Ondo (ONDO) witnessed significant drops during the previous week.
On Saturday, there was a noticeable cooling-off period for investments such as Nvidia stocks and Ethereum tokens. This dip comes after the remarkable surges of the past 60 days in both the crypto market (specifically blockchain) and tech stocks.
The price of Nvidia shares and Ethereum tokens dropped a bit on Saturday, following strong increases in the prices of these investments over the last 60 days in both tech stocks and the crypto market (particularly blockchain).
How The Grinch Stole Bitcoin’s Christmas
So why aren’t crypto assets and equities in the usual holiday spirit this year?
Prior to the holidays, valuations had already reached significant heights. Since November 5th, an optimistic surge, often referred to as the “Trump Bump,” propelled markets to soar with anticipation for a promising four-year period for both cryptocurrencies and U.S. businesses.
Indeed, I’ve observed a significant seller activity among Bitcoin miners this year, largely due to escalating energy costs. This trend has intensified in December, even extending into the holiday period, with miners offloading their holdings at an accelerated rate.
1) It’s possible that a decline in tech stocks could impact the average value of prominent digital currencies as well, considering their growing link with the performance of Nasdaq stocks. The correlation between Bitcoin and Nasdaq stocks, as measured by Pearson over the past 30 days, has been increasing since July, and they’ve been in step more than 70% of the time.
As an analyst, I find myself reminiscing about the game of baseball – a contest where the final score is determined long after the initial pitch. Analogously, in the financial markets, the story isn’t complete until the closing bell on December 31st sounds. With three days left in the year, we eagerly await the direction in which the markets will swing next.
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2024-12-29 18:21