Bitcoin's December Downturn
Bitcoin is ending 2024 on a downward skid, falling nearly 5% in December, despite another significant purchase from MicroStrategy.
Historical Trends Indicate Potential Gains
As we transition into 2025, historical market data suggests that January could be a pivotal month for Bitcoin and the broader cryptocurrency market. Data from Coinglass reveals that Bitcoin has historically averaged a 3.35% increase in January since 2013, and an impressive 57% rise in the first quarters during the same period.
Market Context
Bitcoin is not alone in its year-end struggles; the Nasdaq 100 has also declined by about 5% since the Fed's last policy meeting in mid-December. Interestingly, Bitcoin has seen a 15% drop over the same timeframe. However, Tom Lee from Fundstrat notes that a weak year-end for stocks does not necessarily indicate a bearish beginning for the new year. In fact, data suggests the opposite trend.
December Weakness May Herald January Strength
Historically, when market breadth is weak in December, January tends to be a bounce-back month. Recently, only 18% of NYSE stocks advanced, marking the lowest reading for the last three days of the year in the past 65 years. According to Lee, the 12 worst readings of market breadth at year-end since 1962 have resulted in a 5% median gain in the following January, boasting a 75% win-rate.
MicroStrategy's Continued Investment
This potential for recovery might explain why MicroStrategy continues to buy the Bitcoin dip, recently adding $209 million in Bitcoin, bringing its total holdings to 446,400 BTC, valued at nearly $42 billion.
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