Christmas is about to begin. It’s a time of celebration to get closer to our family and friends. But, these celebrations significantly impact consumers; some even spend the whole year waiting for the Christmas season, which spreads to their financial habits. Thus, Christmas is one of the most expensive times of the year and also affects the BitcoinBitcoin is the first decentralized digital currency. It was created in 2009, by an anonymous founder or group of founders... More (BTCAn abbreviation for Bitcoin.) price.
In previous festivities, we have observed how there has been a direct correlation between Christmas and increases in the Bitcoin price. However, Christmas 2022 seems to be breaking the rule.
What has been the behavior of Bitcoin during the past Christmas?
Although Bitcoin’s ATH occurred in November 2021 when it touched $69,000, during Bitcoin’s history, we have seen its price fluctuate around Christmas.
Between November and December 2013, the Bitcoin price approached $1,200 after spending several months at $100 due to the first halving that occurred on November 28, 2012.
On December 4, it reached $1,147. But, due to the Mt. Gox exchange hack and the events around Silk Road (one of the most important dark markets of all time), the price fell almost 50% the next day.
During Christmas 2014, the Bitcoin price was around $300 and closed with a drop of more than 50% since January. Thus, the controversy surrounding Mt. Gox spread and affected 2014, casting doubts on the security of Bitcoin.
So, during 2015, the Bitcoin price remained between $300 and $400, breaking the barrier during Christmas. For that year, China‘s controls on the flow of capital increased, and investors had a greater interest in cryptocurrencies. On December 11, 2015, the price began to rise slightly and exceeded $400.
In December 2016, the popularization of Bitcoin began, which was quoted at around $756. By Christmas day, the price was over $800 and continued to rise the following year. During that year, cryptocurrencies appeared more frequently in media headlines.
Therefore, the Chinese market again played a very important role during those dates since the People’s Bank of China announced new regulations for the traditional market, and more investors saw Bitcoin as an alternative to safeguard and move their capital.
In 2017 Bitcoin’s bull run was considerable and reached $20,000 on December 17. But, the Bitcoin price experienced a decline in the days leading up to Christmas and did not regain momentum in the following months. In fact, in 2018, the cryptocurrencyA digital currency running on a blockchain and built with cryptography. Contrary to central-bank issued currency, cryptocurrency issuance rules are... More price fell below $4,000.
On the days close to Christmas Day of 2018, the price increased slightly but returned to its downward trend. In December 2019, the market was still in a notable decline, and the price of the cryptocurrency was trading below $7,500, although it had a very slight increase in the days leading up to Christmas.
The second half of 2019 was governed by a decline in the cryptocurrency market. Thus, during Christmas 2019, the Bitcoin price returned to $7,000, influenced by the expiration of the CME Bitcoin futures, which generated an ample supply of BTC.
At Christmas 2020, Bitcoin broke through a new resistance level in the second half of December. Thus, it surpassed $20,000 and maintained momentum through the end of the year.
In 2021 it went from $29,000 to $69,000, and many expected it to end the year at around $100,000. But, the Bitcoin price fell to $50,400 at Christmas. The arrival of Omicron and the stagnation of the United States economy greatly influenced the performance of cryptocurrency during that year.
The Bitcoin price situation for Christmas 2022 does not seem very hopeful. With the collapse of Terra/Luna and the controversy surrounding FTX, the cryptocurrency is hovering around $16,000, down 75% from November 2021.
Why does the Bitcoin price fluctuate at Christmas?
The Christmas dates are a meaningful time for the Western investment market because the demand for assets linked to goods and services tends to increase.
Thus, the customs accompanying these dates, such as giving gifts, also influence the price of cryptocurrencies. They are an increasingly common present and a way to pay for Christmas gifts.
Although, it’s easy to notice that during those festivities in which the cryptocurrency market is in decline, the probability that people use crypto assets such as Bitcoin for their Christmas gifts is less.
Another factor that influences the Bitcoin price at Christmas is that at the end of the year, investors usually review the performance of their investments. Furthermore, it’s common for investors to check the cryptocurrency price forecast for the next year and make decisions based on them.
Interest due at the end of the year and a Christmas bonus being paid in some countries also drive purchases of Bitcoin and other cryptocurrencies when market sentiment is on the upside. This behavior is especially experienced among those new investors who include changing their finances as a New Year’s resolution.
Therefore, at the end and beginning of the year, we see many new investors buying Bitcoin for the first time to immerse themselves in the industry.
However, these claims only apply to the western market. Furthermore, the cryptocurrency market is very young and is a global phenomenon. So, there is insufficient data to draw precise conclusions and provide a definitive explanation for the Bitcoin price.
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