How Likely Is A Bitcoin Rally To $100k This Christmas?

Bitcoin is finally within grasp of its much-awaited $100,000 milestone. At the time of writing, BTC is trading at around $99,000. Donald Trump’s re-election, record inflows from Bitcoin ETFs, and potential rumors of national Bitcoin reserves in the US have strengthened investor confidence in the largest cryptocurrency.

As we head toward Christmas 2024 and a new year, this might be one of the most important and historic holiday seasons for the Bitcoin community. So, how will the Bitcoin market perform throughout the 2024 Christmas season? Is there any particular trend? To answer this, we have to first analyze Bitcoin’s market movements in previous years.

The Infamous Crypto Crash – 2018

For most of the crypto community, 2018 was a year to forget. A year before, Bitcoin and the overall crypto market was booming. However, throughout 2018, the market saw one of the largest bear cycles to date. Bitcoin lost 65% of its value from January to December, while the overall market lost nearly $500 billion. Investor confidence waned due to regulatory concerns and market corrections.

Here’s a look at Bitcoin price trends around Christmas 2018:

Price movement

• December 15, 2018: Bitcoin hit a yearly low of around $3,200.
• Christmas day: Price rebounded slightly to approximately $3,800.
• 1 January 2019 (New Year’s Day): Stabilized around $3,700.

Analysis

• Minor recovery: A slight uptick during Christmas, but overall, prices remained low.
• No significant holiday effect: Movements aligned with broader market recovery rather than seasonal factors.

The year of recovery – 2019

After a long year for the bulls, the Bitcoin market started to recover in 2019. There were a lot of key developments as major exchanges were established and the concept of HODL resonated strongly with investors.

Early 2019 saw Bitcoin rise to about $13,800 in June before declining. The latter half of the year involved price stabilization. Here’s how Bitcoin looking around Christmas 2019:

Price movement

• Christmas day: Traded around $7,200.
• 1 January 2020 (New Year’s Day): Remained steady at approximately $7,200.

Analysis

• Stability: Minimal volatility during the holiday season.
• No distinct pattern: Price movements were subdued, indicating no holiday-specific trends.

The crypto Covid chaos – 2020

When the COVID-19 outbreak shut down the whole world, crypto prices like most other financial institutes began to fall. However, as the outbreak prolonged, the failure of traditional financial systems was becoming more evident. At the same time, inflation began to increase. The adoption of new technologies, a potential inflation hedge, and speculative trading drove Bitcoin’s price to new highs.

Price movements

• Christmas Day: Reached approximately $24,000.
• 31 December 2020: Surpassed $29,000, marking a significant year-end rally.
• 1 January 2021 (New Year’s Day): Held steady around $29,000.

Analysis

• Significant rally: The substantial increase reflects broader bullish market trends rather than holiday effects.
• Market drivers: Institutional investments and macroeconomic factors were primary contributors to the surge.

The peak of the crypto bubble – 2021

In 2021, the crypto market grew by 300% and was worth $2.1trillion at the end of 2021, while the market cap was around $700billion at the start of the year. On 8 November 2021 crypto market value reached its then all-time high at $3trn. This value was only surpassed recently in 2024, after Donald Trump’s re-election, as the market cap soared to $3.4trn.

Here’s what happened to Bitcoin during the 2021 Christmas season:

Price movements

• Christmas Day: Traded around $50,800.
• New Year’s Day (1 January 2022): Decreased slightly to approximately $47,700.

Analysis

• Slight decline: The minor decrease is indicative of normal market volatility.
• Ongoing fluctuations: Price changes were consistent with market dynamics rather than the holiday season.

The crypto winter – 2022

In every aspect, 2022 was the worst year for crypto in its history. Despite the growing adoption in 2021 and record investments, the potential malfunction and bad practices of a handful of major firms brought the whole industry to its knees.

The collapse of Terra Luna’s algorithmic stablecoin UST caused a ripple effect across the industry. Sam Bankman-Fried’s FTX, which was one of the largest exchanges at the time, collapsed and filed for bankruptcy. Investigations revealed how the exchange was using customer funds to give out unlimited loans and credits. Celsius Network also filed for bankruptcy, and customers lost billions across these incidents. Ultimately, the crypto industry’s credibility was at an all-time low and this reflect on Bitcoin’s market.

Here’s how Bitcoin looked during the 2022 Christmas season:

Price movements

• Christmas Day: Hovered around $16,800.
• New Year’s Day (1 January 2023): Slight decrease to approximately $16,600.

Analysis

• Price stagnation: Minimal movement suggests a period of market uncertainty and consolidation.
• Macro economic influence: Broader economic conditions overshadowed any potential holiday impact.

The recovery and renewed optimism – 2023

After the turbulence of 2022, 2023 marked the start of a renewed upward trend for Bitcoin. The year began with Bitcoin trading around $16,600, but optimism returned as macroeconomic pressures eased, and institutional interest rekindled. Notable drivers included BlackRock’s filing for a Bitcoin ETF, regulatory clarity in several regions, and the growing acceptance of Bitcoin as a long-term store of value.

Price movements

• Christmas Day: Traded around $42,000.
• New Year’s Day (1 January 2024): Slight increase to approximately $43,200.

Analysis

• Strong recovery: Bitcoin’s price reflected a robust rebound from its 2022 lows, with year-end movements aligned with growing investor confidence.
• Institutional momentum: Market activity during the holiday season was influenced more by institutional strategies and favorable developments than seasonal factors.
• Improved market sentiment: The recovery of Bitcoin and broader crypto assets demonstrated improved trust in the market’s long-term potential.

Bitcoin’s steady performance in 2023 laid a strong foundation for its significant rally in 2024, moving it closer to its $100,000 milestone.

What’s the bottom line?

So, you might be inclined to think that Bitcoin’s prices during Christmas and New Year tend to recover in a bear market and face stabilization in a bull market. However, the core fact is that Bitcoin’s price movements during these times are predominantly influenced by overarching market conditions rather than seasonal effects. While notable price changes have occurred during the holidays, these are typically aligned with existing market trends and external economic factors.

Bitcoin price prediction for Christmas 2024

As of 22 November 2024, Bitcoin is trading around $99,000, approaching the anticipated $100,000 milestone. Analysts project that by Christmas 2024, Bitcoin’s price could range between $100,000 and $110,000, reflecting a continuation of the current bullish trend.

Image: Bitcoin Fear and Greed Index || Source: Alternative

Here’s a breakdown of the potential factors:

• Technical indicators: Bitcoin’s current Relative Strength Index (RSI) stands at 68, signaling a strong bullish momentum. While it is approaching the overbought threshold (70), this level suggests sustained buying interest and the potential for further upward movement before any significant correction.
• Regulatory environment: The re-election of Donald Trump and the potential appointment of crypto-friendly regulators have bolstered investor confidence, positively impacting Bitcoin’s market performance.
• Market sentiment: The Fear & Greed Index indicates a state of ‘Extreme Greed’, suggesting that investor sentiment remains optimistic, which could sustain upward price momentum.

While these factors support a positive outlook, the cryptocurrency market is inherently volatile. Unforeseen events or policy changes could influence Bitcoin’s price trajectory as the year concludes.