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- Bitcoin dropped to $92,442, marking a four-week low and quashing hopes for a holiday season rally.
- Social sentiment around Bitcoin hit its lowest this year, but analysts suggest this could signal an upcoming price recovery.
Bitcoin experienced a significant downturn in December, dampening expectations of a festive market surge. On December 25, bitcoin was trading at $98,442, which was a four-week low and 14.5% down from the previous record high of $108,000 set on December 17. After rallying to $95,000, Bitcoin dropped to $94,000 on December 24, indicating an 11% drop over the past seven days.
In the past, Bitcoin has exhibited an upward trend during the holiday season, especially in the years preceding market tops. However, the present market outlook does not support this. The sentiment analysis of social media comments about Bitcoin also became negative, with 4:5 positive to negative comments, which was the worst sentiment of 2024.
Market Sentiment Suggests Potential Rebound
According to the market intelligence platform Santiment, low retail sentiment is bullish and could be a sign that the trend is set to reverse. The platform also pointed to the increased fear, uncertainty, and doubt (FUD) among traders, which could be a chance for contrarian players to make their moves based on market shifts. Analysts also highlighted that some fractals are forming on the daily chart of Bitcoin, and if the price manages to go back above $100k in the near future.
Although the near-term outlook signifies bearish sentiment, the opinions of crypto experts regarding the future of BTC remain positive. The history of previous cycles indicates that Bitcoin has historically risen in the last week of December. For instance, price changes were more pronounced between Christmas and New Year in the years prior to major market cycle peaks, that is, in 2016 and 2020.
Historical Patterns and 2025 Outlook
Analysis of past market cycles offers some optimism for Bitcoin. Data from CoinGecko showed that the cryptocurrency market had rallies post-Christmas in the last ten years, with market capitalization rising by 11.8% during the period. Most analysts argued that there was no 2021 rally because the cycle’s peak was in that year.
The Bitcoin price trends of 2024 are consistent with the patterns observed in the preceding corrective phases of earlier cycles. The volatility is expected to persist as $18 billion in Bitcoin and Ethereum options are expected to expire on December 27. However, better macroeconomic prospects and more lenient monetary policies may propel Bitcoin above $160000 by the end of 2025 and bolster the concept of the next cycle peak.
Although the recent corrections, analysts predict a comeback sooner rather than later. Bitcoin’s price charts, specifically its price fractals, indicate a possible bounce back above $100,000 in the near future. Crypto analyst Elja Boom noted similar tendencies in the Dec 20 post, explaining that similar patterns in the past have preceded upward movement.
However, the immediate path is still not clearly defined. Crypto analyst Rekt Capital presented historical data regarding Bitcoin’s corrections in the 7th, 8th, and 9th week of the discovery phases in 2017 and 2021. Bitcoin is now in week 7 and is transitioning into week 8. This suggests that the bear market may continue for another week before it may begin to rebound.
