At simply over 10 years previous, crypto’s largest asset Bitcoin (BTC) has made a reputation for itself as a unstable asset, as proven by its previous value motion. December, particularly, has seen a notable chunk of this volatility with value shifting greater than 30% since 2015. 

As 2019 nears its finish, Bitcoin appears again on a standout yr in phrases — up over 100% from the yearly lows in February of round $3,350. By the top of June, BTC/USD discovered itself up close to $13,800. Then after a number of months of consolidation and subsequent promoting strain, BTC hit 6-months lows of round $6.5K in November solely to get better again to the $7Ks vary.

Crypto house individuals typically search for completely different narratives to make sense of varied value strikes, in addition to attempt to make predictions on future value motion primarily based on historic developments. 

One such narrative entails hypothesis that Bitcoin strikes considerably in December, in step with the Christmas and New 12 months vacation season. Historic value knowledge certainly exhibits this to be the case, significantly over the previous Four years. 

So is Bitcoin set for a unstable December as soon as once more? Let’s check out some historic knowledge for attainable clues.  

December 2015

BTC USD daily chart

BTC USD day by day chart. Supply: TradingView

Beginning with knowledge 4 years in the past, December 2015 noticed Bitcoin shoot up greater than 34% within the month of December. 

Bitcoin started the month with a crimson day, wicking all the way down to $349 on Dec. 2. The next a number of days, nonetheless, hosted optimistic value motion, resulting in Bitcoin’s December 2015 excessive of $469, $119 increased than its Dec. 2 low. 

Bitcoin rode a bullish pattern for the primary half of the month, topping out close to Dec. 15, adopted by consolidation and promoting strain throughout the latter half of the month. 

December 2016

BTC USD daily chart

BTC USD day by day chart. Supply: TradingView

A yr later, Bitcoin noticed beneficial properties of greater than 35% throughout the identical interval. However in contrast to in 2015, nonetheless, Bitcoin held a really slight upward pattern for the primary half of December 2016, posting small day by day candles full of little or no value exercise. 

Just like 2015, Bitcoin hit its December 2016 low at the start of the month, dropping to a value of $743. It was not till the second half of the month that BTC ramped up its volatility, 

in the end hitting $1,010 by Jan. 1, 2017.  

December 2017

BTC USD daily chart

BTC USD day by day chart. Supply: TradingView

On Dec. 1, 2017, BTC depraved all the way down to $9,410 earlier than occurring its historic experience to $19,700, tallying a value transfer of greater than 109%. 

This 2017 December experience coincided with the Chicago Mercantile Change (CME) and the Chicago Board Choices Change (CBOE) each launching their respective physically-settled BTC futures buying and selling merchandise. 

The CBOE launched its Bitcoin futures buying and selling product on Dec. 10. Then Bitcoin reached its all-time excessive close to $19,700 on Dec. 17, 2017, proper when the CME launched its personal cash-settled Bitcoin futures buying and selling product. 

Just like 2015, the BTC value elevated for the primary half of the month. After its all-time excessive, Bitcoin suffered a steep correction throughout the second half of the month, which in the end began a bear market that may final greater than a yr. 

December 2018

BTC USD daily chart

BTC USD day by day chart. Supply: TradingView

Final yr, value motion was in contrast to the earlier years, nonetheless. Whereas BTC did present over 35% in value motion over the course of December 2018, the web value stayed the identical. 

The asset’s value depraved as much as $4,275 on Dec. 2, adopted by promoting strain till the center of the month the place it tapped its final bear market backside at $3,125. 

Through the second half of the month, Bitcoin proceeded to rally all the best way again as much as $4,275 earlier than closing out the month with draw back consolidation. 

Basically, Bitcoin noticed each a 35% decline and a subsequent 35% rally in the identical 31 day interval, leaving the market wanting again on an total unstable December. 

Theories explaining the “Santa Claus rally” in markets

The final 4 years of value knowledge clearly present notable exercise throughout the vacation month of December. A value transfer of greater than 30% is important, whatever the asset. 

The info additionally exhibits the center of the month as vital when it comes to topping or bottoming value exercise, except for 2016.

However whereas there’s no particular clarification for this seemingly seasonal volatility, Cointelegraph market analyst filbfilb says that conventional markets additionally typically see volatility round this time — a phenomenon generally known as the “Santa Claus rally.” 

He defined:

“The Santa Claus Rally refers back to the tendency for the inventory market to rally over the past weeks of December into the New 12 months. A number of theories exist for its existence, together with elevated vacation purchasing, optimism fueled by the vacation spirit, or institutional traders settling their books earlier than occurring trip.”

Crypto dealer and Twitter character Jacob Canfield additionally weighed in on Bitcoin’s December value motion, telling Cointelegraph: 

“Whereas it’s straightforward to create narratives for Bitcoin, I’m of the opinion that there isn’t any ‘seasonality’ to Bitcoin relating to the time of the yr. Though we’ve seen vital upward strikes earlier than, we have additionally seen vital draw back strikes as properly.”

BTC USD monthly chart

BTC USD month-to-month chart. Supply: TradingView (by way of Jacob Canfield)

Canfield did, nonetheless, level out a distinct idea primarily based on massive gamers and tax implications. 

“One idea that I’ve heard is that skilled merchants and establishments take their income going into January to hedge for his or her taxes for the brand new fiscal yr,” he stated. “So whereas this does not clarify we see upward value strikes in Bitcoin, it could clarify why we see a sell-off in January.”

Whatever the rationale, December has hosted vital value actions every year since 2015. Will this yr proceed the pattern?

The views and opinions expressed listed below are solely these of (@benjaminpirus) and don’t essentially mirror the views of Cointelegraph. Each funding and buying and selling transfer entails threat. You need to conduct your personal analysis when making a choice.



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