December is just around the corner with the Christmas season filled with decorations, lights, joy, family time, and the holidays. The season’s cheer spread its wings into the stock and crypto markets giving birth to the phrase ‘Santa Claus rally’.
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What is the Bitcoin Santa Claus Rally?
The Santa Claus rally is a phenomenon where the stock markets rally in the days leading up to Christmas. Therefore, investors believe December to be a lucky month for stocks that could also help Bitcoin and the crypto markets to rally.
Investors believe that the Santa Claus rally in the stock markets will flow into crypto markets making Bitcoin spike in price in December.
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Should You Invest in BTC Hoping For A Santa Claus Rally?
The Santa Claus rally is nothing but a happy-go-lucky feeling that investors dream of taking place during the festive season. However, the reality is far from the truth, as Bitcoin and the crypto markets have barely rallied in December. In 2021, Bitcoin reached its all-time high of $69,044 in November but declined in price in December.
The crypto markets fared well till November 2021 but spiraled down in December with no effect of the Santa Claus rally.
Also, data indicated that the stock markets rallied in December only a few times in the last 20 years. The majority of the time, the markets mostly traded sideways and remained calm throughout December.
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The reason for the non-action in price in December could be that investors are in the mood for the holiday season, giving a break to the market activities.
In conclusion, the Santa Claus rally does not guarantee that the stock, Bitcoin, and crypto markets will perform exceptionally well in December.
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At press time, Bitcoin was trading at $16,498 and is up 1.7% in the 24 hours day trade. BTC is down 76.1% from its all-time high of $69,044, which it reached in November last year.