Bitcoin (BTC) Underperforms as 2024 Draws to a Close, Countering Its Historical "Santa Rally" Performance

The largest cryptocurrency generally adds about 2.8% in the 51st week, this week it's on course to slide 11%.

Bitcoin (BTC) price continues to underperform in the final weeks of 2024, diverging from its historical tendency to rally during the year-end “Santa Claus period.”

Data shows that BTC price typically adds about 2.8% during the 51st week of the year. However, this year, the BTC price is poised to slip by 11%.

Additionally, while BTC tends to gain about 3% during the 52nd week, five out of the past six years have seen the BTC price decline during this week. Hence, there is not much optimism remaining for this year either.

The precise timing of the so-called Santa Claus rally is up for debate, but it broadly encompasses the period from December into early January, with a possible buffer of a few days on either side.

This trend also extends to the fourth quarter as a whole, with Q4 historically being one of bitcoin's strongest quarters. But this year, BTC has underperformed in this regard as well.

According to data from Coinglass, since 2013, the average BTC price increase in the last three months of the year has been 85%. In 2024, however, this gain is less than 50%.

This ongoing price decline is also reminiscent of the start of 2021, albeit a bit later than when Santa Claus would be visiting—admittedly, a tenuous comparison at best.

On Jan. 8, 2021, bitcoin was trading at around $40,000. By Jan. 27, the price had dropped to $30,000, marking a 25% decline, which is steeper than the current 15% drawdown.

However, that drawdown occurred during a bull run that began with bitcoin at around $10,000 in December 2020, ultimately peaking at $70,000 in November 2021.

One similarity to the present scenario is that the realized price, which represents the average on-chain cost for all tokens in circulation, continues to rise, indicating that investors, on average, continue to acquire coins at higher prices.

At the same time, the price remains above the short-term holder's realized price (STH RP), which reflects the average on-chain acquisition price for coins that were last moved within 155 days.

Between December 2020 and April 2021, bitcoin sustained itself above the STH RP, utilizing this level as support, which is typical for bitcoin during bull markets. The current STH RP is at $84,000, suggesting that the bull market might still be holding as long as BTC remains above this key price point.