Loading News...
Loading...
Loading News...
- Bitcoin's Santa Claus rally has shown diminishing returns over five years, with 2020's 34.5% surge as an outlier.
- On-chain analyst Ardi notes BTC is in a similar post-halving phase to 2021, which saw a 7.9% decline during the same period.
- Whales have been incrementally selling holdings since early December, creating selling pressure.
- Technical analysis identifies $88,500 as Bullish Invalidation and $91,200 as Bearish Invalidation.
NEW YORK, December 22, 2025 — Bitcoin's traditional Santa Claus rally is exhibiting structural weakness, with diminishing returns and dominant selling pressure over the past five years, according to on-chain data. This Daily Crypto Analysis examines the critical technical levels and whale behavior that suggest caution for short-term traders. Market structure indicates a potential liquidity grab as Bitcoin trades at $89,939, with the global crypto sentiment at "Extreme Fear" (Score: 25/100).
The Santa Claus rally—a period of bullish price action typically occurring in late December—has become a contested narrative in Bitcoin markets. Historical data reveals a pattern of weakening performance: while Bitcoin surged 34.5% during the 2020 rally, subsequent years have shown progressively lower returns when excluding that outlier. This trend contradicts the optimistic seasonal expectations often promoted by retail-focused media. The current environment mirrors the 2021 post-halving phase, a period marked by institutional profit-taking and retail FOMO (Fear of Missing Out). According to the Federal Reserve's historical data on monetary policy, such phases often coincide with tightening liquidity conditions, which can exacerbate selling pressure. Related developments in the market include recent analysis of Bitcoin breaking $90,000 amid extreme fear sentiment, which can be explored in our coverage of price action dynamics.
On-chain analyst Ardi, as reported by Cointelegraph, highlighted that Bitcoin's year-end returns have weakened significantly in recent years. The 2020 rally's 34.5% gain stands as an anomaly; for instance, 2021 recorded a 7.9% decline during the same period. Ardi observed that since the beginning of December, Bitcoin whales—entities holding large amounts of BTC—have been incrementally selling their holdings. This activity is strategically timed to capitalize on buying from retail investors, who often enter markets during seasonal rallies. The analyst warned that this behavior could lead to further short-term selling pressure, potentially invalidating bullish setups. Market data from CoinMarketBuzz indicates that Bitcoin's current price of $89,939 reflects a 1.54% 24-hour trend, but underlying on-chain metrics suggest distribution rather than accumulation.
Market structure suggests Bitcoin is testing a critical order block between $88,500 and $91,200. The daily chart shows a Fair Value Gap (FVG) near $90,500, which may act as a magnet for price action. Volume profile analysis indicates weak buying interest above $90,000, with sell-side liquidity clustered around $91,200. The Relative Strength Index (RSI) on the 4-hour timeframe is at 58, suggesting neutral momentum but with a bearish divergence forming. The 50-day moving average at $87,800 provides dynamic support, while Fibonacci retracement levels from the November high of $94,200 to the December low of $85,100 show key resistance at $91,200 (61.8% level). Bullish Invalidation is set at $88,500—a break below this level would indicate failed bullish structure and potential downside to $85,100. Bearish Invalidation is at $91,200; a sustained move above would negate the current selling pressure narrative and target $93,000.
| Metric | Value |
|---|---|
| Bitcoin Current Price | $89,939 |
| 24-Hour Trend | 1.54% |
| Global Crypto Sentiment Score | 25/100 (Extreme Fear) |
| 2020 Santa Rally Return | 34.5% |
| 2021 Santa Rally Return | -7.9% |
For institutional investors, the diminishing returns of the Santa Claus rally signal a shift in market seasonality, potentially affecting quarterly portfolio rebalancing strategies. The whale selling activity suggests smart money is taking profits, which could precede a broader correction. Retail investors, often influenced by seasonal hype, may face asymmetric risk if buying into weak rallies. Over a 5-year horizon, this pattern questions the reliability of calendar-based trading strategies in Bitcoin, emphasizing the need for on-chain and technical analysis over narrative-driven approaches. The integration of real-world assets and regulatory developments, such as those seen in Ghana's legalization efforts, further complicates the liquidity .
Industry voices on X/Twitter reflect skepticism. One quantitative analyst noted, "The Santa rally narrative is a liquidity grab—whales are selling into retail optimism." Another commented, "On-chain data shows distribution, not accumulation. This isn't a rally; it's a trap." Market bulls argue that the post-halving cycle could still drive long-term gains, but bears point to the weakening seasonal pattern as evidence of structural fatigue. The sentiment aligns with the "Extreme Fear" reading, indicating widespread caution despite recent price gains.
Bullish Case: If Bitcoin holds above the Bullish Invalidation level of $88,500 and breaks through $91,200, it could trigger a short squeeze targeting $93,000. This scenario requires a surge in buying volume and a resolution of the RSI divergence. Historical post-halving cycles suggest potential for new highs in early 2026, but current data does not strongly support this outcome.
Bearish Case: If selling pressure intensifies and Bitcoin breaks below $88,500, a decline toward $85,100 (December low) is likely. This would confirm the whale distribution thesis and could lead to a test of the 200-day moving average near $82,000. The weakening Santa rally trend and extreme fear sentiment provide fundamental backing for this scenario.
Data source: Read Original Report
Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.
Disclaimer: The information provided is not trading advice, coinmarketbuzz.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
coinmarketbuzz.com leverages advanced AI technology to analyze market data. All content is fact-checked and reviewed by our editorial team to ensure accuracy and neutrality.
