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Will it be a merry Christmas for crypto this year?

By Solomon Victor

As the world gets all festive with lights, the crypto market, like a well-traveled holiday-goer, is getting ready for its yearly ups and downs.

Santa Claus Rally

The idea of the Santa Claus rally isn’t just for the traditional markets; it also affects the crypto world, especially bitcoin (BTC). This event happens when prices of assets go up between late December and early January, influenced by holiday positivity and less trading activity. However, it’s not all straightforward— looking at past data, we see a mix of prices going up, down, or staying the same during this festive time.

In 2022, the crypto market weathered shocks—from geopolitical events like Russia’s invasion of Ukraine to the Terra (LUNA) ecosystem collapse and the FTX exchange crash. Bitcoin, along with other cryptocurrencies, bore the brunt, and the entire cryptocurrency market experienced a significant decline.

The transition from the challenging bear market of 2022 to more positive sentiment in 2023 sets the stage for analyzing potential Christmas trends. Bitcoin rebounded, gaining over 150% as of December 2023, fueled by factors such as the expected approval of the spot Bitcoin ETF and the upcoming Bitcoin halving in April 2024.

You might also like: Bitcoin surges past $30,000 as US SEC drops case against Ripple executives

Bitcoin’s lowered volatility and the perception as a safe-haven asset in 2023, especially during the U.S. banking crisis, contribute to a potentially bullish outlook for 2024. Regulatory developments, including rulings favoring Ripple’s XRP token sales and discussions on bitcoin and Ethereum-based ETFs, hint at a more regulated and stable market in the coming year.

2024 Crypto Market Predictions: 

As we approach 2024, the crypto market’s evolving factors invite contemplation. A notable shift towards crypto derivatives trading dominated 2023, overshadowing traditional spot trading. Reports show that Decentralized finance (DeFi) derivatives are expected to gain momentum in 2024. This signals renewed interest in decentralized finance.

Fundraising in 2023 faced challenges, marked by a three-year low in investment, reflecting investor caution amid a complex macroeconomic landscape. Potential interest rate hikes by the Federal Reserve in 2024 could further influence market behavior and impact cryptocurrency values.

Bitcoin’s halving event in 2024 is anticipated to bring momentum to its price, historically viewed as a positive sign. The intersection of artificial intelligence and cryptocurrency emerges as a trend likely to open new investment avenues and enhance transactional security in 2024.

British Bank, Standard Chartered forecasts Bitcoin reaching $120,000 by the end of 2024, signaling the end of the so-called “crypto winter.” 

Nonetheless, intense regulatory scrutiny and difficult macroeconomic considerations as well as the growing threat of digital technology continue to provide significant obstacles for the cryptocurrency market. Therefore, the crypto asset buyer must be cautious.

How to Navigate the Crypto Seas During Christmas

For traders venturing into the crypto seas during the Christmas season, navigating with caution is essential.

  • Understand Market Volatility: During the holiday season expect increased volatility and some trading opportunities.
  • Set Trading Goals: Whether short-term profits are your priority or a buy-and-hold strategy, define where you want to go.
  • Keep Learning and Stay Informed on Global Events: Take this time to learn about market analysis, technologies, and new tendencies. Even in celebration, pay attention to events around the world that might affect markets.
  • Risk Management: Apply good risk management strategies, including setting stop-loss orders and diversifying your portfolio into different asset classes
  • Be Cautious with Leverage: During volatile times, use leverage carefully.
  • Stay Level-Headed: Turbulent emotions; keep your wits about yourself in trading.
  • Use Reliable Trading Platforms: Beware of fraud; make sure you use legitimate, upstanding trading platforms.

BTC Price Outlook on a Short Term

The price of BTC slid from around $ 44,000 to the level of about $40,000 last week but has recovered. According to data from CoinGecko, the price of BTC stands at $43,119, with a 4.90 % increase in the last 24 hours, and up by 2.7 % in the past 7 days. If the bullish wave continues, the BTC price may hit $50,000. 

However, a break below the $40,000 support could drag the BTC price to lower levels ranging from $38,000 to $36,000.

Read more: Over 80% Bitcoin Holders in Profit as Price Crosses $41k

Credit: Solomon Victor is a Technical Analyst who is also knowledgeable about various aspects of blockchain and cryptocurrency.