Bitcoin It’s been the toughest fourth quarter since 2022, but a time-honored Wall Street pattern may soon give battered BTC bulls some relief.
The pattern is the S&P 500’s Santa Claus rally – a rise during the last five trading days of December and the first two trading days of January. A repetition of this pattern could improve sentiment in the Bitcoin market.
Bullish Santa Seasonal
According to market statistics, since 2005, the S&P 500 has risen 15 times during the Santa Claus rally and fallen only 5 times, with an average return of 0.58%. Dating back to the 1950s, it’s up 77% during this window and hasn’t declined for three consecutive years. The index has declined over the past two Santa Claus periods.
Taken together, the data means the S&P 500 could be poised for a rebound in the new year.
For BTC, the bullish seasonality of the S&P 500 is becoming increasingly important as more institutions adopt the link between crypto assets and stocks through ETFs. As a result, holiday buying in the stock market could spread to Bitcoin and the broader cryptocurrency market.
Since its launch, BTC’s Santa Claus rally history has been bumpy, with gains of 33% and 46% in 2011 and 2016 respectively. Other years have been weaker, with a 14% drop in 2014 and a 10% drop in 2021. However, with an average decline of 7.9% since 2011, the market size is quite small and was dominated by OG in the early years.
gold, star performer
Gold has been the best performer, with a cumulative return of 95% during this period, according to TheMarketStats. Looking back to 2005, only 2023 saw a slightly negative return.
This strength coincides with gold prices rising to a record high above $4,400 an ounce at press time, suggesting another positive Santa Claus period.
Overall, while gold prices are at all-time highs, the S&P 500 is only 1.5% away from its all-time high. Meanwhile, Bitcoin prices remain about 30% below their peak.
