History doesn't repeat itself, but it does rhyme.
Christmas is coming, and the New Year of 2025 is approaching. Christmas, New Year, Trump's inauguration, Bitcoin's half-year reduction... With these buffs, Bitcoin may be expected to end the adjustment and return to the upward track again.
Christmas is coming, is the crypto market correction over?
The Federal Reserve announced a rate cut last week and lowered the possibility of further rate cuts, leading to a global market collapse. Bitcoin fell from its historical high of 108,000 to around 90,000 US dollars in just a few days. Altcoin were in a bloodbath, and some tokens lost all their gains during the bull market.
Matt Hougan, chief investment officer at Bitwise Asset Management, attributed the recent crypto market pullback to a “natural unwinding of leverage,” and stressed that “the long-term drivers remain intact and we are still in a strong bull market.”
This pullback caused a large-scale liquidation and reduced market leverage. At the same time, Christmas will come this week, and the global market may usher in a "Christmas rally". The "Christmas rally" refers to the last five trading days of the year and the first two trading days of the New Year. Historically, the US stock market has a positive trend in these seven days. Bitcoin is currently greatly affected by the trend of US stocks and gold. If the stock market is doing well, this may drive the sentiment of the crypto market up.
Historically, Bitcoin has often surged during and after the “half-year” Christmas season, such as in 2016 and 2020. This increases expectations that Bitcoin will surge in the short term.
Future trend: Both up and down are possible, with high volatility
Analysis: Bitcoin may remain volatile in the near term before a bullish trajectory emerges in Q1 next year
David Lawant, head of research at cryptocurrency prime broker FalconX, wrote in a report that near-term price volatility for bitcoin remains the “most likely scenario” before a “bullish trajectory” emerges in the first quarter of 2025.
Lawant said that as we enter the final days of the year, the low liquidity environment may bring more volatility, especially because BTC may see its largest options expiration event in history on December 27.
There is no doubt that both upside and downside possibilities are high in the coming days.
Analysis: BTC fluctuated greatly during the Christmas holiday, but the actual increase or decrease did not exceed 10% except in 2020
