Over the years, Bitcoin has often observed remarkable price surges as the year draws to a close. Since 2013, the cryptocurrency has averaged an impressive 85% gain in the fourth quarter alone. Traditionally, the last week of December brings a typical increase of about 3%. However, recent patterns tell a different story. In fact, Bitcoin has seen price declines during this crucial period in five out of the last six years. At present, the price for short-term holders sits at approximately $84,000, suggesting that the bullish sentiment might persist as long as Bitcoin stays above this pivotal level.
Current Trends and Predictions
As 2024 nears its conclusion, Bitcoin seems to be trailing its usual year-end momentum, often dubbed the “Santa rally.” While historical data shows an average rise of 2.8% during the 51st week of the year, this year’s forecast indicates a concerning drop of 11%. Furthermore, although Bitcoin generally climbs by 3% in the final week of the year, its track record shows that it has faced declines more often than not recently, leaving many to question whether a rebound is on the horizon this year.
Market Conditions Comparison
The Santa rally typically unfolds in late December, extending into early January, though the specifics can vary from year to year. While Bitcoin’s fourth quarter is notorious for strong performance, the data for 2024 paint a less favorable picture. Instead of the usual soaring prices, this year’s increase is expected to be under 50%, a significant departure from the past.
When we examine current market conditions, they evoke a sense of déjà vu reminiscent of early 2021—albeit slightly delayed for a typical holiday boost. To provide some context, on January 8, 2021, Bitcoin was priced around $40,000. By January 27, it had plummeted to $30,000, reflecting a steep 25% decrease—a bit higher than the more recent 15% downturn. However, that earlier decline transpired during a broader upward trend, which began around $10,000 in December 2020 and culminated in a staggering $70,000 by November 2021.
Realized Prices and Future Outlook
A pivotal takeaway is the realized price, which illustrates the average cost for all Bitcoin currently in circulation. This figure has been on an upward climb, indicating that investors are acquiring Bitcoin at increasing prices. Moreover, the current trading prices are still above the short-term holder’s realized price (STH RP), calculated from the average acquisition price for Bitcoin transacted in the prior 155 days. During the last bullish market, spanning from December 2020 to April 2021, Bitcoin consistently outperformed the STH RP, using it as a vital support level. With the STH RP presently at $84,000, maintaining prices above this threshold could signal that the bullish trend still possesses the potential to continue.
In summary, as we analyze the current landscape surrounding Bitcoin and its anticipated Santa rally, we find ourselves at a crossroads—historical trends suggest significant gains, yet recent performances may challenge these expectations. Only time will reveal if Bitcoin can defy the odds and embrace a robust year-end rally.
Source: Coindesk
