Just before Christmas I wrote about the Christmas Surge in financial products (latterly including Crypto) that has happened 79% of time since records began in 1929 and anticipated that Christmas 2025 into New Year 2026 would be on of those 21% of occasions when nothing would happen and in the first couple of weeks of the New Year it looked like I had read it wrong. I even wrote a couple of positive posts about Tezos and Atom, but now that early year optimism has rapidly faded.

The fact is that the post‑Christmas crypto boom has already broken down, and the data suggests the market is now in a corrective phase rather than a continuation of the rally and not only that but it is consistent across the board whoever is doing the reporting. What we have actually seen is BitCoin fall 22–27% in December, a fall that wiped out the expected “Santa Rally” and reversed the upward movement we had seen in the autumn. Concerning alts, many large‑cap tokens also dropped sharply, with Ethereum down 28% in Q4. Accordingly, analysts have described this period as the worst drawdown since the 2022 crypto winter and most certainly not the start of a new bull run.

So, it seems that I was right after all - even if it didn’t manifest itself as I thought it would.

This has come about due to a number of macro pressures including high real yields, delayed rate cuts, and geopolitical risk, all of which have combined to overpower the oft-anticipated seasonal bullishness. Furthermore, liquidity was thin over the holidays, which amplified volatility and sell‑offs and profit‑taking and weak technical signals all led to the usual Christmas optimism never materialising.

So, in short and based on the evidence from the market, it very much seems that the seasonal rally is over, and not only that. One source I found even went as far as to say "It didn’t just fade — it failed outright and as a result it very much looks like the market is now behaving like it’s in a consolidation / correction phase rather than a continuation of the boom".

Probably the best we can draw from this is that often such a phase in the cycle can provide a foundation for further growth, but this will very much depend on a number of factors including the timing of any central bank cutting of interest rates and improvement in liquidity, ETF inflows/outflows and the consolidation of BitCoin prices at December prices as a launchpad for further growth among others. Of course, it goes without saying (but I am going to say it anyway), this all must settle into any wider risk‑asset sentiment.

For me one of the things it does represent, is an opportunity to move more of my USD based free crypto off the faucets as it has more purchasing power in a depressed market. Just yesterday, I added another 0.04 LiteCoin to my free stash (sourced through Cointiply and CoinPayU). For those of you who read my post about the race to get a free Solana or LiteCoin first, it does seem very much that LiteCoin (the Hare) is extending its lead, but I haven’t added this month’s free Solana yet (of which there will be at least $USD4 - approx 0.04 SOL which means it will remain on par at the very least without considering the staking income) and there is still some way to go yet. Having said that I am confident that I will have one of each asset by the end of the year and maybe even mid-year.

As always stay safe and well my friends.