As 2024 draws to a close, bitcoin (BTC) is underperforming, bucking its historical performance in a year-end “Santa rally.”
The largest cryptocurrency usually adds around 2.8% in week 51, this week it is on track to drop 11%. And, while it tends to gain 3% in week 52, in five of the last six years the price of BTC has fallen. So this time there is not much hope either.
The exact time for what is considered a Santa rally varies, but it is clearly when December approaches January and perhaps a few days on either side.
The trend also extends to the entire quarter. The fourth quarter tends to be one of Bitcoin’s strongest, but it is underperforming this year. Since 2013, the price of BTC has risen an average of 85% in the last three months of the year, Coinglass data shows. In 2024, it will be less than 50%.
This current reduction is reminiscent of early 2021, although admittedly a little later than Santa would come down the chimney.
On January 8, 2021, bitcoin was around $40,000. By January 27, the price had fallen to $30,000, a 25% drop and somewhat larger than this current 15% drop.
However, that drawdown came amid a bull run that started at around $10,000 in December 2020 and ended in November 2021 at $70,000. The similarities are that the realized price, the average on-chain cost for all tokens in circulation, continues to rise, meaning investors, on average, are purchasing coins at higher prices.
Meanwhile, the price remains ahead of the short-term holder’s realized price, reflecting the average on-chain acquisition price of the coins that moved in the last 155 days.
From December 2020 to April 2021, bitcoin remained above the short-term holder’s realized price (STH RP) and used this level as support; Typically, in bull markets, Bitcoin uses this price level as support. The current STH RP is $84,000, which would suggest that the bull market will remain intact as long as bitcoin remains above this key level.
