Gold and silver have risen crazily: Is Bitcoin "lagging behind" or building momentum during Christmas week?

Written by: Bootly

As we enter Christmas week, the global market's initial answer does not belong to the crypto market. Against the backdrop of a weakening dollar and falling US bond yields, risk aversion sentiment has rapidly intensified, with gold and silver taking the lead in the market, continuously hitting historical highs and becoming the hottest destination for funds.

In contrast, the cryptocurrency market appears unusually quiet, with Bitcoin not following the macro tailwinds to take off, but instead continuing to hover in the 88,000-89,000 fluctuation range, lacking the aggressive posture one would expect before the holiday.

It is against this backdrop of contrast that the question of whether Bitcoin will experience a “Santa Rally” has once again become a topic of repeated discussion in the market. The so-called Santa Rally is originally a seasonal phenomenon in traditional financial markets, referring to a phase of rising risk assets driven by improved sentiment and changes in liquidity around Christmas. However, when applied to the crypto market, this rule has never been stable. This year, whether Bitcoin is “lagging behind” amidst rising risk aversion or quietly building strength within a high range still requires us to return to the real price action and funding structure to seek answers.

Funding situation: The macro environment is still in a “wait-and-see” state, with risks of capital outflow from risk assets.

CF Benchmarks Research Director Gabriel Selby pointed out that market participants are unlikely to significantly increase their allocation to risk assets such as Bitcoin before the Federal Reserve receives clear data pointing to a sustained decline in inflation for several consecutive months. In his view, the current macro environment is still in a “wait and see” phase.

This cautious sentiment is closely related to investors' heightened focus on a series of upcoming U.S. economic data. The third-quarter GDP data will be released soon, with the market generally expecting an annualized growth rate of about 3.5%, slightly lower than the 3.8% in the second quarter; at the same time, indicators such as the consumer confidence index and weekly initial unemployment claims will provide more clues about the labor market conditions. The results of this data will directly impact the market's assessment of the Federal Reserve's policy path and further influence overall risk appetite.

From other macro conditions, the weakening of the dollar and the retreat of US Treasury yields indeed provide a theoretically favorable environment for risk assets. However, the actual choices of funds present a completely different answer.

According to statistics from SoSoValue, there has been a clear differentiation in the ETF sector recently: the Bitcoin ETF recorded a net outflow of approximately $158.3 million, while the Ethereum ETF saw an outflow of about $76 million; in contrast, the XRP and Solana ETFs recorded small inflows of approximately $13 million and $4 million, respectively, indicating that funds are undergoing structural adjustments within the cryptocurrency market, rather than an overall return.

From a broader perspective on digital asset investment products, CoinShares pointed out in its latest weekly fund flow report that there was a net outflow of approximately $952 million from digital asset investment products last week, marking the first shift to net redemptions after four consecutive weeks of inflows. CoinShares attributes part of the outflow to the regulatory uncertainty caused by the slowed advancement of the U.S. Clarity Act, which has led institutional investors to prefer reducing risk exposure in the short term.

Technical Structure: Mainly Sideways

From a technical structure perspective, the current trend of Bitcoin is not clearly bearish, but it is also difficult to describe it as strong. The range of $88,000 to $89,000 has become the core oscillation zone that has been repeatedly tested in the short term, while the area of $93,000 to $95,000 constitutes the key resistance that bulls must break through.

Multiple traders pointed out that if Bitcoin cannot effectively break through this resistance zone during Christmas week, even if there is a short-term rebound, it is more likely to be seen as a technical correction rather than a trend reversal. Conversely, if the price continues to maintain a high sideways range, it indicates that the market is waiting for new drivers rather than actively choosing a direction.

The structure of the derivatives market also partly explains why Bitcoin has been particularly restrained during Christmas week. This Friday, the Bitcoin market will witness the largest options settlement in history, with a total value of up to $24 billion. Currently, both bulls and bears are engaged in fierce competition at crucial price levels:

Bullish: Betting that BTC will break through the $100,000 barrier;

Short: Defending the $85,000 level with all its might;

The critical point: $96,000 is seen as the watershed for this round of trends. If it holds here, it can maintain the rebound momentum; otherwise, the market will continue to be under pressure.

What do analysts think?

Multiple market observers have pointed out that this year's Christmas week resembles a “structural test” rather than a one-sided market window driven by sentiment.

Gabriel Selby, head of research at CF Benchmarks, stated in a recent interview that the current price action of Bitcoin does not conform to the typical characteristics of a Santa Rally. In his view, a true holiday rally is often accompanied by sustained buying pressure and trend continuation, rather than a back-and-forth struggle within a high range. “What we are seeing now looks more like the market digesting the previous gains, rather than gearing up for the next rise.” This judgment is also corroborated by the reality of persistently low trading volumes.

Cryptocurrency analyst DrBullZeus stated that BTC continues to fluctuate between the same support and resistance levels, with no significant breakout yet. Before a clear breakout occurs, the price will remain in a range-bound trend. A breakout above the resistance level will open up the path to the $92,000 mark, while a drop below the support level could lead to a price retreat to the $85,000 area.

Legendary trader Peter Brandt's latest review points out that Bitcoin has experienced 5 cycles of “parabolic growth followed by an 80% retracement” over the past 15 years, and the adjustment in this current cycle has not yet bottomed. Although the short-term patterns are harsh, he predicts through cycle extrapolation that the next bull market peak will arrive in September 2029.

Brandt emphasizes that assets like BTC are destined to reach new highs amid extreme washouts.

Overall, Bitcoin's “Christmas rally” has always been elusive. Looking back at history, there have been dazzling performances like the increases of 33% and 46% during the holiday seasons of 2012 and 2016, but there have also been years of mediocrity or even declines. Statistically, since 2011, Bitcoin's average increase during the Christmas period has been about 7.9%.

However, from the current market landscape, it seems difficult to replicate the typical “Santa Claus rally” this year. The strength of gold and silver reflects a concentrated release of market risk aversion; in contrast, Bitcoin's relative “calmness” once again highlights its perception as a risk asset in global asset allocation at this stage.

Therefore, rather than simply attributing Bitcoin's current performance to being “left behind”, it is more accurate to say that it is in a critical and delicate position: on one hand, there is a lack of sufficient macro tailwinds to directly propel it onto a new upward trajectory; on the other hand, there have not yet been any clear signals of a breakout weakening.

What truly determines whether Bitcoin can break out into an independent market by the end of the year is not the “Christmas” time label, but whether market funds are willing to re-bet at the current high levels. Until this is clearly confirmed, narrow fluctuations may still be the main theme of this Christmas week.