Here is the rewritten content:
Bitcoin’s Santa Rally: A Year-End Tradition Turned Sour
The Disappointing Performance of Bitcoin in the Last Week of the Year
As the year draws to a close, the largest cryptocurrency, Bitcoin (BTC), is underperforming, deviating from its historical trend of a year-end "Santa rally." Traditionally, the cryptocurrency tends to add around 2.8% in the 51st week, but this year it is on course to slide 11%. Moreover, while it is known to gain around 3% in the last week of the year, this trend has not been observed in five of the past six years, and this year is no exception.
The Santa Rally: A Year-End Tradition
The exact timing of the Santa rally is not fixed, but it typically occurs towards the end of December, often in the first few days of January. This phenomenon is not unique to Bitcoin, as it has been observed in other assets, including stocks and commodities.
The Fourth Quarter: A Period of Strength for Bitcoin
Historically, the fourth quarter has been a period of strength for Bitcoin, with the price rising an average of 85% between October and December, according to data from Coinglass. However, this year, the trend is bucking the norm, with the price increasing by less than 50% in the last three months of the year.
A Similarity with the Start of 2021
The current drawdown is reminiscent of the start of 2021, when the price dropped by 25% between January 8th and 27th. However, that drawdown was part of a larger bull run, which began in December 2020 and ended in November 2021 at $70,000. The current drawdown is different, as it is not part of a larger upswing.
The Realized Price: A Key Indicator
The realized price, which is the average on-chain cost for all tokens in circulation, continues to drive higher, indicating that investors are buying coins at higher prices. The price is also above the short-term holder’s realized price, which is the average on-chain acquisition price for coins that were moved within the last 155 days. This level is often used as support in bull markets, and as long as Bitcoin stays above this level, the bull market is still intact.
Conclusion
In conclusion, the year-end Santa rally is a year-end tradition that has not panned out this year. Bitcoin’s price is underperforming, and the fourth quarter, which is typically a period of strength for the cryptocurrency, has seen a disappointing performance. While there are similarities with the start of 2021, the current drawdown is not part of a larger upswing. The realized price remains a key indicator, and as long as it continues to drive higher, the bull market may still be intact.
FAQs
Q: What is the Santa rally?
A: The Santa rally is a year-end phenomenon where certain assets, including Bitcoin, tend to experience a surge in price in the last week of the year.
Q: Why is the Santa rally important?
A: The Santa rally is important because it provides a positive end to the year, which can boost investor confidence and sentiment.
Q: What is the realized price?
A: The realized price is the average on-chain cost for all tokens in circulation, which is an important indicator of the overall health of the market.
Q: What is the short-term holder’s realized price?
A: The short-term holder’s realized price is the average on-chain acquisition price for coins that were moved within the last 155 days, which is often used as support in bull markets.
