Bitcoin and Ethereum ended December with few signs of the year-end explosion that traders often rely on, capping a quarter that shows how fragile cryptocurrency rallies can look when liquidity wanes and risk appetite wanes.
The so-called ‘Santa Rally’ never really came. Instead, bitcoin’s repeated attempts to reclaim key levels were sold off, while ether and large-cap tokens continued lower.
Bitcoin is on track to end December down around 22%, its worst month since December 2018, while ether is on track to end Q4 2025 down 28.07%, according to data curated by CoinGlass.
A ‘Santa rally’ is the tendency for markets to rally in the last week of December and early January, driven by low liquidity, year-end portfolio rebalancing and optimistic holiday sentiment.
That weak finish is important because cryptocurrencies have historically relied on strong year-end flows to build momentum early in the cycle. This time, December seemed more like a reset of positioning than the beginning of a new bullish leg.
With bitcoin’s Q4 performance turning sharply negative, the quarterly tape now reads as risk out rather than risk on.
The contrast with precious metals has been hard to miss.
Gold has hit new highs on expectations of rate cuts and geopolitical stress, while silver has risen and platinum has also hit new highs, as CoinDesk previously reported.
Gold has benefited from steady demand from central banks and growing ETF allocations, bolstering its role as a reserve-style hedge when investors are uneasy.
Bitcoin, by comparison, has been marketed more as a high-beta asset. Even as the macroeconomic backdrop points toward looser policy, Bitcoin has struggled to maintain its gains without a broader risk bet.
The pattern has become familiar in late 2025, when bounces have been met with rapid profit-taking, leverage has been reduced over the holidays, and US time has tended to see the biggest selling as funds clear positions.
Volatile yields and a choppy dollar have kept investors in capital preservation mode, a setup that tends to favor gold first and speculative assets second.
The first test will be whether Bitcoin can maintain its recent support zones into the new year. If it can’t do so, the failed Santa Claus rally can be remembered as an early warning that the market still needs a deeper reset before the next sustained run.
