Bitcoin BTC$90,016.95 Although the company experienced its toughest fourth quarter since 2022, long-standing patterns on Wall Street could soon bring relief to battered BTC bulls.
The pattern is the S&P 500’s tendency to draw a Santa rally, an increase in the last five business days of December and the first two days of January. If this pattern repeats, Bitcoin market sentiment could improve.
Santa’s strong sense of the season
Since 2005, the S&P 500 index rose 15 times during the Santa Claus Rally and fell only five times, for an average return of 0.58%, according to data source The Market Stats. Going back to the 1950s, it rose 77% of the time during this period, never falling for three years in a row. The index has declined over the past two Santa periods.
Taken together, these data sets mean the S&P 500 is likely to continue rising into the new year.
For BTC, this bullish S&P 500 seasonality is becoming increasingly important as increasing institutional adoption through ETFs strengthens the nexus between digital assets and stocks. As such, the stock market festivities could spill over into Bitcoin and the broader crypto market.
BTC’s Santa Claus Rally history has been checkered since its inception, returning to 33% and 46% in 2011 and 2016, respectively. Other years were weaker, with declines of 14% in 2014 and 10% in 2021. Still, because the market is so small and dominated by OGs in the early days, the average since 2011 is 7.9%.
star performer gold
According to TheMarketStats, gold performed the best, achieving a cumulative return of 95% over this period. Looking back at 2005, only 2023 recorded a slightly negative return.
This strength coincides with gold hitting new all-time highs of over $4,400 per ounce at the time of writing, suggesting another positive Santa period.
To put it in perspective, gold is trading at an all-time high while the S&P 500 is only 1.5% away from its own record level. Meanwhile, Bitcoin is still about 30% below its all-time high.