Will Santa Visit the Crypto Market This Christmas? So Far, It's Just Been 'Passing By'

Contrary to expectations, Bitcoin has experienced a significant decline during the Christmas season. As of December 24, Bitcoin is trading at $93,807, marking a steep 12% drop in just a week.

This trend deviates from the patterns observed over the past decade. Historically, Bitcoin has shown a 70% probability of rising in the week leading up to Christmas, with an average gain of 1.3%. However, this year, after hitting an all-time high of $108,249 on December 18, Bitcoin has been on a consistent downward trajectory.

The primary factor behind this slump appears to be the Federal Reserve’s monetary policy. Investor sentiment has weakened following indications of a slower pace of rate cuts next year. This cautious outlook is further reflected in the withdrawal of funds from U.S. Bitcoin spot ETFs for two consecutive trading days.

Experts warn that further declines could be on the horizon. Burak Kesmeci, an analyst at CryptoQuant, highlighted that Binance’s Bitcoin futures open interest has reached an all-time high of $12.5 billion. “If historical patterns hold true, Bitcoin could dip as low as $82,220,” he predicted.