As we enter Christmas week, the global market's response does not belong to the cryptocurrency market. Amid a weakening dollar and a retreat in U.S. Treasury yields, risk aversion sentiment quickly intensified, with gold and silver taking the lead in the market, continuously refreshing historical highs, becoming the hottest destination for funds.
In contrast, the cryptocurrency market appears unusually quiet. Bitcoin has not soared alongside macroeconomic tailwinds but continues to remain in the 88,000-89,000 oscillation range, lacking the offensive posture expected before the holiday.
It is against this backdrop of contrast that the question of whether Bitcoin will experience a 'Santa Rally' has once again become a topic of repeated discussion in the market. The so-called Santa Rally is originally a seasonal phenomenon in traditional financial markets, referring to the phase of rising risk assets driven by improved sentiment and changes in liquidity around Christmas. However, when applied to the cryptocurrency market, this pattern has never been stable. This year's Bitcoin, is it 'falling behind' amid rising risk aversion sentiment, or is it quietly building strength within a high range? We still need to return to the real price behavior and capital structure to find the answer.
The macro environment is in a 'wait for validation' phase, with capital flowing out of risk assets.
CF Benchmarks Research Director Gabriel Selby pointed out that market participants are unlikely to significantly increase their allocation to risk assets like Bitcoin until the Federal Reserve receives several months of clear data indicating a continued decline in inflation. In his view, the current macro environment is still in a 'wait for validation' phase.
This cautious sentiment is closely related to investors' heightened attention to a series of upcoming U.S. economic data. Third quarter GDP data will be announced soon, with the market generally expecting an annualized growth rate of about 3.5%, slightly lower than the 3.8% in the second quarter; at the same time, indicators like the consumer confidence index and weekly initial unemployment claims will also provide more clues about labor market conditions. The results of these data will directly affect the market's judgment on the Federal Reserve's policy path and further influence overall risk appetite.
From other macro factors, the weakening dollar and falling U.S. Treasury yields indeed provide a theoretically favorable environment for risk assets. However, the reality of capital choices has given a completely different answer.
According to statistics from SoSoValue, a clear differentiation has emerged recently at the ETF level: Bitcoin ETFs recorded a net outflow of approximately $158.3 million, while Ethereum ETFs saw a capital outflow of about $76 million; in contrast, XRP and Solana ETFs recorded slight net inflows of about $13 million and $4 million respectively, also indicating that capital is undergoing internal market adjustments as well as overall structural adjustments.
From a broader perspective on digital asset investment products, CoinShares noted in its latest weekly fund flow report that there was a net outflow of approximately $952 million from digital asset investment products last week, marking the first shift to net redemptions after four consecutive weeks of inflows. CoinShares partly attributes this capital outflow to the slower pace of the advancement of the U.S. Clarity Act, which has brought regulatory uncertainty, causing institutional investors to tend to reduce risk exposure in the short term.
Technical structure: primarily sideways
From a technical structure perspective, Bitcoin's current trend is not clearly bearish, but it is also difficult to describe as strong. The range of $88,000 to $89,000 has become the core oscillation zone verified repeatedly in the short term, while the area of $93,000 to $95,000 constitutes the key resistance that bulls must break through.
Several traders pointed out that if Bitcoin fails to effectively break through this resistance range during Christmas week, even if a short-term rebound occurs, it is more likely to be seen as a technical correction rather than a trend reversal. Conversely, if prices continue to maintain a high-level sideways trend, it indicates that the market is waiting for new driving factors rather than actively choosing a direction.
The structure of the derivatives market also somewhat explains why Bitcoin appears particularly restrained during Christmas week. This Friday, the Bitcoin market will face the largest options settlement in history, with a total value of up to $24 billion. Currently, both bulls and bears are engaged in intense battles at critical price levels:
Bulls: betting that BTC will break through the $100,000 barrier;
Bears: are fully defending the $85,000 level;
Key level: $96,000 is seen as the watershed of this trend; holding this level can maintain rebound momentum, otherwise the market will continue to face pressure.
What analysts think
Several market observers pointed out that this year's Christmas week resembles a 'structural test' rather than an emotionally driven unilateral market window.
CF Benchmarks Research Head Gabriel Selby candidly stated in a recent interview that Bitcoin's price behavior does not conform to the typical Santa Rally characteristics. In his view, a true holiday market is often accompanied by sustained buying dominance and trend continuation, rather than back-and-forth tugging within a high-level range. 'What we are seeing now seems more like the market digesting previous gains rather than gearing up for the next upward movement.' This judgment is also corroborated by the current reality of persistently low trading volume.
Cryptocurrency analyst DrBullZeus stated that BTC continues to fluctuate between the same support and resistance levels, with no significant breakthroughs observed. Before a clear breakthrough occurs, prices will remain within a range-bound oscillation. A breakout above the resistance level will open up space towards the $92,000 mark, while a drop below the support level could lead to a price retreat to the $85,000 area.
Legendary trader Peter Brandt's latest review points out that Bitcoin has experienced five cycles of 'parabolic growth followed by an 80% pullback' over 15 years, and the adjustment of the current cycle has yet to find a bottom. Although the short-term patterns are grim, he predicts that the next bull market peak will arrive in September 2029 through cycle extrapolation.
Brandt emphasized that the asset characteristics of BTC dictate its need to reach new highs through extreme washouts.
Overall, Bitcoin's 'Christmas market' has historically been difficult to grasp. Looking back at history, there have been dazzling performances like the 33% and 46% gains during the festive periods of 2012 and 2016, but there have also been years of lackluster or even declining performance. Statistically, since 2011, the average increase of Bitcoin during the Christmas period is about 7.9%.
However, from the current market pattern, it seems difficult to reproduce the typical 'Christmas rally' this year. The strength of gold and silver reflects a concentrated release of market risk aversion; in contrast, Bitcoin's relative 'calm' again highlights its current perception as a risk asset in global asset allocation.
Therefore, rather than simply attributing Bitcoin's current performance to being 'left behind', it is more accurate to say it is in a critical and delicate position: on one hand, there is a lack of sufficient macro tailwinds to directly propel it onto a new upward trajectory; on the other hand, there have not yet been clear signs of a significant breakdown.
What truly determines whether Bitcoin can break out into an independent market at the end of the year is not the time label 'Christmas', but whether market capital is willing to re-bet at the current position. Until this is clearly confirmed, narrow fluctuations may still be the main theme of this Christmas week.
(The above content is excerpted and reprinted with the authorization of partner PANews, original link | Source: BitPush)
"Gold and silver soar: is Bitcoin 'falling behind' or gathering strength during Christmas week?" This article was first published on (Blockcast).
