The past performance of Bitcoin (BTC) is often used to try to predict future performance. This is why many investors, traders and market analysts expected Bitcoin to have a bullish rally that would take it to new heights, precisely around this time.
The trader who identifies himself on social media as “Mister Crypto” had written on December 11: “Bitcoin always goes parabolic around Christmas in halving years. This time will be no different.”
Perhaps bitcoin will surprise us tomorrow, but at least as of this writing, there is no Christmas rally happening. On the contrary, bitcoin is closer to $90,000 than to its all-time high of $108,000 .
Bitcoin (BTC) price over the past month. Source: CoinGecko.
Another person who was convinced that the “Santa Claus rally” would happen again in 2024 was the person who identifies himself on social media as Crypto Rover. In any case, this specialist puts the date for “after Christmas” so his prediction could still come true.
It was on December 17th when Crypto Rover wrote on X:
BITCOIN CHRISTMAS RALLY IS COMING! 🚀 Bitcoin always goes parabolic after Christmas. ARE YOU READY?
Crypto Rover, trader.
Considering the time frame mentioned by Crypto Rover, we might think that the Christmas rally still has a chance to materialize. After all, if there's one thing Bitcoin knows how to do, it's surprise with its unpredictable movements.
But that is not the case at the moment. And several factors have combined to produce the drop in the price of bitcoin over the past week.
First, the US Federal Reserve (Fed) announced that only two interest rate cuts are planned in 2025. This came as a shock to investors and traders who were expecting much more drastic announcements.
And what do the Fed's interest rates have to do with the price of BTC? When dollar interest rates are low, it is cheaper to borrow money. This money can then be taken to speculative assets such as bitcoin and cryptocurrencies.
Moreover, when interest rates are low, Treasury bond yields are also low, so investors look for more volatile assets to make higher profits. In that context, bitcoin and cryptocurrencies benefit.
On the other hand, Fed Chairman Jerome Powell explained on December 18 that the agency he heads cannot own bitcoin. This seems to directly impact President-elect Donald Trump's plans to establish a strategic national reserve in BTC.
It is worth clarifying that Powell is not the bad guy for saying this. He is simply explaining what the laws in the United States establish. This means, then, that there will have to be a legislative modification (either through Congress or by presidential decree) for Trump to be able to fulfill his promises.
However, the fact that Trump will not have such an easy path to create his promised strategic reserve in BTC has discouraged investors, who massively executed sell orders, causing the price of BTC to plummet.
Trump announced in mid-year that he would create a bitcoin reserve. Source: Aljazeera.
Every drop is a buying opportunity
Amid fluctuations and apparent disappointments, market enthusiasts and strategists should not lose hope. Expectations for the coming year remain bullish for bitcoin . Those who consider investments with a medium- and long-term perspective have no reason to fear, even in the face of momentary drops in the asset's price.
CriptoNoticias has reported several of these bullish predictions. For example, the investment and analysis firm, Fundstrat, believes that bitcoin will reach $200,000 in 2025 . Analysts from the financial company, Bernstein, think the same.
Furthermore, prediction markets show that there is a high chance (or at least high expectation) that at least one of the 7 largest companies in the world (Apple, Microsoft, Google, Amazon, Nvidia, Meta and Tesla) will buy bitcoin in 2025. If this were to happen, and any of these companies decided to follow a MicroStrategy-style accumulation strategy, it would be extremely bullish for bitcoin.
Despite the fact that the expected Christmas rally of 2024 has not materialized (yet), and with an immediate context that could seem discouraging, the volatile nature of bitcoin suggests that there is still potential for an increase in its value. These oscillations, far from being merely negative, offer opportunities for astute investors who know when the time is right to accumulate more assets.
One strategy for situations like this is Dollar-Cost Averaging (DCA). This technique involves investing a fixed amount into bitcoin at regular intervals, regardless of its price. This way, investors can mitigate the risks associated with market volatility and potentially build up a more significant position over time.
Bitcoin's history has shown that, beyond short-term corrections, its overall trend has been upward. Investors who maintain a long-term view and who do not get carried away by market emotions are usually the ones who benefit the most.
Historical chart of the price of bitcoin (BTC). Source: CoinGecko.
Therefore, looking ahead, there is little doubt that bitcoin will continue its upward trajectory. The key is to stay informed, be patient and take advantage of the opportunities the market offers, especially when it seems to go against the general sentiment.
So even if Christmas 2024 doesn't bring the rally many were hoping for, the future of bitcoin is still bright (plus, look at how much bitcoin has gone up this year and stop complaining!).
Prudent, long-term investment strategies such as DCA, coupled with constant market monitoring and informed analysis, can prepare investors to make the most of the upcoming opportunities that are sure to emerge in 2025.
Merry Christmas! 😀
