Table of Contents
Introduction
We had previously covered about the Santa Rally in What Is Santa Rally? Can Santa Bring Bitcoin Bulls In 2025 article. Has the rally begun yet?
The simple answer, for now, is no. Prices remain range-bound, with no decisive breakout on either side. This lack of directional movement creates uncertainty, making it difficult to confidently commit to long or short positions.
Even though it’s December 24, neither the bulls nor the bears have been able to take control of the crypto market. At this stage, it may feel like the Santa Rally has been cancelled this year. However, before jumping to conclusions, let’s break down the data and price action to determine whether the rally has truly begun—or if it’s still waiting to unfold.
For Context BTC ETH and SOL chart has been attached:
It’s clear that instead of a Santa Rally, the market has delivered a Santa Sideways.
ETF Flows: The Missing Catalyst So Far
One of the biggest expectations going into December was that spot ETFs—especially Bitcoin ETFs—would act as a strong tailwind for a year-end rally. Historically, structural demand combined with thin holiday liquidity has often produced sharp upside moves. This year, however, ETF flows tell a more nuanced story.
While Bitcoin ETFs continue to see steady participation, the flows have largely been balanced rather than aggressive. Inflows are being met with periodic outflows, suggesting that institutions are still active—but not yet convinced enough to push prices decisively higher. This behavior aligns perfectly with the current price action: accumulation without expansion.
Ethereum ETFs show a similar pattern. Despite ETH’s strong long-term narrative—staking yields, Layer 2 growth, and institutional positioning—the ETF data suggests hesitation rather than conviction. ETH remains trapped in a range, reflecting a market that is watching rather than acting. This lack of directional commitment reinforces why ETH has struggled to lead the market higher, something it typically does during strong risk-on phases.
Solana, while not benefiting from traditional spot ETFs in the same way as BTC and ETH, has seen increased exposure through institutional products and structured vehicles. However, just like the broader market, SOL’s momentum has cooled. After strong relative performance earlier, capital rotation appears to have slowed, with traders opting to lock in gains rather than chase higher prices into year-end uncertainty.
Why ETFs Aren’t Igniting the Rally (Yet)
There are three key reasons why ETF flows haven’t translated into a Santa Rally so far:
First, institutions tend to reduce risk near year-end, not increase it. Many funds prioritize balance-sheet cleanup, profit booking, and portfolio rebalancing in December. Even if the long-term outlook is bullish, aggressive positioning is often deferred to January.
Second, macro uncertainty still lingers. Interest rate expectations, liquidity conditions, and global risk sentiment remain fluid. Until there is clarity on these fronts, ETF participation is likely to remain tactical rather than directional.
Third, price structure matters. ETFs amplify trends—they don’t usually start them. With BTC, ETH, and SOL all stuck in well-defined ranges, ETF flows are being absorbed rather than expanded. A clean breakout would likely attract momentum-based inflows, but without it, capital remains cautious.
What Would Confirm the Santa Rally?
For the Santa Rally to be considered “real” and not a trap, a few conditions need to align.
Bitcoin must break and hold above its established range with strong volume and sustained ETF inflows, not just a single spike. Ethereum needs to reclaim key resistance levels and begin outperforming Bitcoin, which historically signals broader risk appetite. Solana, meanwhile, should stabilize and resume relative strength rather than reacting sharply to every BTC move.
Equally important is market behavior after the breakout. A true rally shows follow-through—higher lows, expanding participation, and reduced volatility to the downside. A fake-out, on the other hand, is marked by quick rejections and aggressive mean reversion back into the range.
Past Santa Rallies: Bitcoin Price Performance
Historically, the Santa Rally refers to the tendency of risk assets—including crypto—to perform well during the final week of December and the first few trading days of January. While it doesn’t occur every year, Bitcoin has shown notable year-end strength in several cycles.
Bitcoin Santa Rally Performance (Historical)
| Year | Approx. Start Price | Approx. End Price | Price Movement | % Change |
|---|---|---|---|---|
| 2016 | $900 | $970 | +$70 | +7.7% |
| 2017 | $14,000 | $19,200 | +$5,200 | +37% |
| 2020 | $26,500 | $29,000 | +$2,500 | +9.4% |
| 2021 | $46,800 | $51,500 | +$4,700 | +10% |
| 2023 | $42,200 | $45,000 | +$2,800 | +6.6% |
Note: Santa Rallies are not guaranteed. Years like 2018 and 2022 failed to deliver a meaningful year-end bounce due to strong bear market conditions.
Why Santa Rallies Don’t Happen Every Year
Santa Rallies tend to occur when market structure, sentiment, and liquidity align. When even one of these elements is missing—as appears to be the case this year—the rally often turns into consolidation instead of expansion.
In years where Bitcoin was already in a strong uptrend or early bull phase, the Santa Rally acted as a trend accelerator. In contrast, during distribution phases or macro uncertainty, the same period resulted in sideways or choppy price action.
Frequently Asked Questions (FAQ)
What is a Santa Rally?
A Santa Rally refers to a seasonal market phenomenon where prices tend to rise during the last week of December and the first few days of January. In crypto, this often manifests as short-term bullish momentum driven by sentiment and liquidity dynamics.
Why does a Santa Rally occur?
Santa Rallies typically occur due to a combination of:
- Reduced market liquidity
- Positive year-end sentiment
- Short covering
- Portfolio rebalancing
- Fresh capital positioning ahead of the new year
These factors can amplify price moves when demand outweighs supply.
When does the Santa Rally usually start?
Traditionally, the Santa Rally begins after December 24 and can extend into the first week of January. However, timing varies each year and is highly dependent on broader market conditions.
Does the Santa Rally apply to crypto or only stocks?
While the concept originated in equity markets, crypto has increasingly followed similar seasonal patterns—especially as institutional participation has grown. That said, crypto volatility can exaggerate or completely negate the effect.
Why hasn’t the Santa Rally started this year?
So far, price action remains range-bound, ETF flows lack aggressive conviction, and neither bulls nor bears have taken control. Without a decisive breakout, seasonal optimism alone is not enough to trigger a sustained rally.
Can a delayed Santa Rally still happen?
Yes. In some years, strength appears after year-end, transitioning into a January rally instead. A late breakout could still validate the broader seasonal thesis, even if December underperforms.
How should traders approach the market during a Santa Sideways phase?
During range-bound conditions:
- Prioritize risk management
- Avoid over-leveraging
- Trade levels, not narratives
- Wait for confirmation rather than anticipation
Final Take: Rally Delayed, Not Dead
At this stage, calling the Santa Rally either confirmed or cancelled would be premature. The ETF data suggests interest without urgency, positioning without aggression. This supports the idea that the market is waiting—either for a catalyst or for the calendar to turn.
For now, Santa Sideways remains the dominant theme. But markets have a habit of moving when conviction is lowest. Whether the rally arrives late—or turns into a January effect instead—will depend on how price reacts once these ranges finally give way.
Until then, patience is the trade.
Disclaimer: All information provided is for educational purposes only. Cryptocurrency investing and trading carries significant risk; consult a financial advisor before making decisions.
Read about our Bitcoin Death Cross blog here.
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