Bitcoin Moves 30% in December Since 2015 — Will 2019 Be Different?

At simply over 10 years previous, crypto’s largest asset Bitcoin (BTC) has made a reputation for itself as a risky asset, as proven by its previous worth motion. December, in explicit, has seen a notable chunk of this volatility with worth shifting greater than 30% since 2015. 

As 2019 nears its finish, Bitcoin seems to be again on a standout yr in phrases — up over 100% from the yearly lows in February of round $three,350. By the top of June, BTC/USD discovered itself up close to $13,800. Then after a number of months of consolidation and subsequent promoting stress, BTC hit 6-months lows of round $6.5K in November solely to recuperate again to the $7Ks vary.

Crypto area members typically search for totally different narratives to make sense of varied worth strikes, in addition to attempt to make predictions on future worth motion based mostly on historic traits. 

One such narrative includes hypothesis that Bitcoin strikes considerably in December, in line with the Christmas and New Yr vacation season. Historic worth information certainly reveals this to be the case, notably over the previous four years. 

So is Bitcoin set for a risky December as soon as once more? Let’s check out some historic information for doable clues.  

December 2015

BTC USD day by day chart. Supply: TradingView

Beginning with information 4 years in the past, December 2015 noticed Bitcoin shoot up greater than 34% in the month of December. 

Bitcoin started the month with a purple day, wicking all the way down to $349 on Dec. 2. The next a number of days, nonetheless, hosted optimistic worth motion, resulting in Bitcoin’s December 2015 excessive of $469, $119 larger than its Dec. 2 low. 

Bitcoin rode a bullish pattern for the primary half of the month, topping out close to Dec. 15, adopted by consolidation and promoting stress through the latter half of the month. 

December 2016

BTC USD daily chart

BTC USD day by day chart. Supply: TradingView

A yr later, Bitcoin noticed good points of greater than 35% throughout the identical interval. However in contrast to in 2015, nonetheless, Bitcoin held a really slight upward pattern for the primary half of December 2016, posting small day by day candles full of little or no worth exercise. 

Just like 2015, Bitcoin hit its December 2016 low at the start of the month, dropping to a worth of $743. It was not till the second half of the month that BTC ramped up its volatility, 

finally hitting $1,zero10 by Jan. 1, 2017.  

December 2017

BTC USD daily chart

BTC USD day by day chart. Supply: TradingView

On Dec. 1, 2017, BTC depraved all the way down to $9,410 earlier than happening its historic trip to $19,700, tallying a worth transfer of greater than 109%. 

This 2017 December trip coincided with the Chicago Mercantile Alternate (CME) and the Chicago Board Choices Alternate (CBOE) each launching their respective physically-settled BTC futures buying and selling merchandise. 

The CBOE launched its Bitcoin futures buying and selling product on Dec. 10. Then Bitcoin reached its all-time excessive close to $19,700 on Dec. 17, 2017, proper when the CME launched its personal cash-settled Bitcoin futures buying and selling product. 

Just like 2015, the BTC worth elevated for the primary half of the month. After its all-time excessive, Bitcoin suffered a steep correction through the second half of the month, which finally began a bear market that might final greater than a yr. 

December 2018

BTC USD daily chart

BTC USD day by day chart. Supply: TradingView

Final yr, worth motion was in contrast to the earlier years, nonetheless. Whereas BTC did present over 35% in worth motion over the course of December 2018, the online worth stayed the identical. 

The asset’s worth depraved as much as $four,275 on Dec. 2, adopted by promoting stress till the center of the month the place it tapped its final bear market backside at $three,125. 

Through the second half of the month, Bitcoin proceeded to rally all the way in which again as much as $four,275 earlier than closing out the month with draw back consolidation. 

Basically, Bitcoin noticed each a 35% decline and a subsequent 35% rally in the identical 31 day interval, leaving the market wanting again on an general risky December. 

Theories explaining the “Santa Claus rally” in markets

The final 4 years of worth information clearly present notable exercise through the vacation month of December. A worth transfer of greater than 30% is important, whatever the asset. 

The info additionally reveals the center of the month as vital in phrases of topping or bottoming worth exercise, except for 2016.

However whereas there’s no particular clarification for this seemingly seasonal volatility, Cointelegraph market analyst filbfilb says that conventional markets additionally typically see volatility round this time — a phenomenon typically known as the “Santa Claus rally.” 

He defined:

“The Santa Claus Rally refers back to the tendency for the inventory market to rally during the last weeks of December into the New Yr. A number of theories exist for its existence, together with elevated vacation buying, optimism fueled by the vacation spirit, or institutional buyers settling their books earlier than happening trip.”

Crypto dealer and Twitter persona Jacob Canfield additionally weighed in on Bitcoin’s December worth motion, telling Cointelegraph: 

“Whereas it’s simple to create narratives for Bitcoin, I’m of the opinion that there is no such thing as a ‘seasonality’ to Bitcoin on the subject of the time of the yr. Though now we have seen vital upward strikes earlier than, we have additionally seen vital draw back strikes as properly.”

BTC USD monthly chart

BTC USD month-to-month chart. Supply: TradingView (by way of Jacob Canfield)

Canfield did, nonetheless, level out a unique idea based mostly on massive gamers and tax implications. 

“One idea that I’ve heard is that skilled merchants and establishments take their income going into January to hedge for his or her taxes for the brand new fiscal yr,” he stated. “So whereas this does not clarify we see upward worth strikes in Bitcoin, it might clarify why we see a sell-off in January.”

Whatever the rationale, December has hosted vital worth actions annually since 2015. Will this yr proceed the pattern?

The views and opinions expressed listed below are solely these of (@benjaminpirus) and don’t essentially replicate the views of Cointelegraph. Each funding and buying and selling transfer includes threat. It’s best to conduct your personal analysis when making a call.

About Tom Greenly

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