Bitcoin’s Q4 Slump: A Departure from Its Usual Strong Finish
As 2024 draws to a close, Bitcoin (BTC) is failing to live up to its usual end-of-year performance, breaking from the pattern of a typical “Santa rally” that often boosts prices during the holiday season.
Bitcoin historically gains an average of 2.8% in the 51st week of the year, but this time, it is on track to lose around 11%. In the 52nd week, Bitcoin typically sees a 3% gain, but over the past six years, it has fallen in five of them, leaving little hope for a rally this time around. The “Santa rally,” which generally happens as December transitions into January, seems to be absent this year.
The trend extends beyond just the final weeks of the year. The fourth quarter is usually one of Bitcoin’s strongest periods, with an average increase of 85% since 2013, according to Coinglass data. However, in 2024, Bitcoin has gained less than 50%, falling short of its historical performance.
This current slump bears some resemblance to the beginning of 2021, though it’s happening later than usual for a Santa rally. On January 8, 2021, Bitcoin was priced around $40,000. By January 27, it had dropped to $30,000, a 25% slide—larger than the current 15% drop. However, that decline was part of a broader bull run that started in December 2020 at $10,000 and peaked at $70,000 by November 2021.
A similar factor is at play: the realized price—the average price at which Bitcoin holders acquired their coins—has been rising, indicating that investors are purchasing at higher prices, suggesting long-term confidence in Bitcoin. Moreover, Bitcoin’s price remains above the short-term holder’s realized price (STH RP), which tracks the average price of coins moved in the last 155 days.
From December 2020 to April 2021, Bitcoin stayed above the STH RP, using this level as support, which is a typical feature of bull markets. Currently, the STH RP stands at $84,000, which suggests that the market could still be in a bull phase as long as Bitcoin holds above this critical support level.
