Gold and silver have skyrocketed: Is Bitcoin "lagging behind" or building momentum during Christmas week?

As we enter Christmas week, the global market's response does not belong to the crypto market. Against the backdrop of a weakening dollar and a decline in U.S. Treasury yields, risk aversion sentiment has rapidly intensified, with gold and silver leading the market, their prices continuously breaking historical highs, becoming the hottest destinations for funds.

In contrast, the crypto market appears unusually quiet, with Bitcoin not following the macro tailwind to take off, but rather continuing to hover in the 88,000-89,000 fluctuation range, lacking the offensive posture expected before the holiday.

It is under such contrast that the question of whether “Bitcoin will experience a Santa Rally” has once again become a topic of repeated discussion in the market. The so-called Santa Rally is originally a seasonal phenomenon in traditional financial markets, referring to the phase of rising risk assets around Christmas driven by improved sentiment and changes in liquidity. However, in the crypto market, this rule has never been stable. This year, whether Bitcoin is “falling behind” amidst rising risk aversion or quietly building momentum within a high-level range still requires us to return to the real price behavior and funding structure to find the answer.

The macro environment is “waiting for verification”, and there is a risk of capital flowing out of risk assets.

Gabriel Selby, the research director at CF Benchmarks, pointed out that before the Federal Reserve receives clear data indicating a sustained decline in inflation for several consecutive months, market participants are unlikely to significantly increase their allocation to risky assets like Bitcoin. In his view, the current macro environment is still in a “wait-and-see” phase.

This cautious sentiment is closely related to investors' heightened attention to a series of upcoming U.S. economic data. The GDP data for the third quarter will be released soon, with the market generally expecting an annualized growth rate of around 3.5%, slightly lower than the 3.8% in the second quarter; at the same time, indicators such as the consumer confidence index and weekly initial jobless claims will also provide more clues about the labor market conditions. The results of this data will directly affect the market's judgment of the Federal Reserve's policy path and further sway overall risk appetite.

From other macro factors, the weakening of the dollar and the decline in U.S. Treasury yields have indeed provided a theoretically favorable environment for risk assets. However, the actual choices of capital have given a completely different answer.

According to statistics from SoSoValue, there has been a noticeable divergence at the ETF level recently: Bitcoin ETFs recorded a net outflow of approximately $158.3 million, while Ethereum ETFs saw a cash outflow of about $76 million; in contrast, XRP and Solana ETFs recorded slight inflows of approximately $13 million and $4 million, respectively, indicating that funds are also undergoing structural adjustments within the crypto market rather than an overall return.

From a broader perspective of digital asset investment products, CoinShares pointed out in its latest weekly fund flow report that last week, digital asset investment products experienced a net outflow of approximately $952 million, marking the first switch to net redemptions after four consecutive weeks of inflows. CoinShares attributes part of this outflow to the regulatory uncertainty brought about by the slowing pace of the U.S. Clarity Act, leading institutional investors to prefer reducing their risk exposure in the short term.

Technical structure: mainly sideways

From a technical structure perspective, Bitcoin's current trend is not obviously bearish, but it is also hard to call it strong. The range of 88,000 to 89,000 USD has become the core fluctuation zone that has been repeatedly tested in the short term, while the area of 93,000 to 95,000 USD constitutes the key resistance that the bulls must break through.

Multiple traders have pointed out that if Bitcoin cannot effectively break through this resistance zone during Christmas week, any short-term rebound is more likely to be seen as a technical correction rather than a trend reversal. Conversely, if the price continues to maintain a high level of consolidation, it indicates that the market is waiting for new driving factors rather than actively choosing a direction.

The structure of the derivatives market also partly explains why Bitcoin has appeared particularly restrained during Christmas week. This Friday, the Bitcoin market will witness the largest options settlement in history, with a total value of up to 24 billion dollars. Currently, both bulls and bears are engaged in intense competition at a critical price level:

• Bullish: Betting that BTC will break through the $100,000 barrier;
• Short: Defending the 85,000 dollar level with full force;
• Win-Loss Hand: $96,000 is seen as a watershed for this round of trends. If it holds steady here, it can maintain the rebound momentum; otherwise, the market will continue to be under pressure.

How do analysts view ###

Multiple market observers pointed out that this year's Christmas week seems more like a “structural test” rather than a sentiment-driven one-sided market window.

Gabriel Selby, the research director of CF Benchmarks, bluntly stated in a recent interview that the current price behavior of Bitcoin does not align with the typical characteristics of a Santa Rally. In his view, a genuine holiday rally is often accompanied by sustained buying pressure and a continuation of trends, rather than oscillating within a high range. “What we are seeing now seems more like the market digesting previous gains rather than gearing up for the next upward phase.” This assessment is also corroborated by the reality of persistently low trading volumes.

Crypto analyst DrBullZeus stated that BTC continues to fluctuate between the same support and resistance levels, with no significant breakout observed yet. Until a clear breakout occurs, the price will remain in a range-bound movement. Breaking through the resistance level will open up the space towards the $92,000 mark, while falling below the support level could lead to a price retracement to the $85,000 area.

Legendary trader Peter Brandt's latest review pointed out that Bitcoin has gone through 5 cycles of “parabolic growth followed by an 80% retracement” in the past 15 years, and the adjustment in this cycle has not yet reached its bottom. Although the short-term patterns are harsh, he predicts through cyclical deduction that the next bull market peak will arrive in September 2029.

Brandt emphasized that assets like BTC are destined to reach new highs amidst extreme washouts.

Overall, Bitcoin's “Christmas rally” has always been elusive. Looking back in history, there have been dazzling performances like the 33% and 46% increases during the holiday seasons of 2012 and 2016, but there have also been years of mediocrity or even decline. Statistically, since 2011, the average increase of Bitcoin during the Christmas period has been approximately 7.9%.

However, from the current market landscape, it seems difficult to replicate the typical “Santa Claus rally” this year. The strength of gold and silver reflects a concentrated release of market risk aversion; in contrast, Bitcoin's relative “calmness” once again highlights its current perception as a risk asset in global asset allocation.

Therefore, rather than simply attributing Bitcoin's current performance to being “left behind”, it is better to say that it is in a critical and delicate position: on one hand, there is a lack of sufficient macro tailwinds to directly propel it onto a new upward trajectory; on the other hand, there has yet to be a clear signal of breaking down and weakening.

What truly determines whether Bitcoin can break out into an independent market by the end of the year is not the “Christmas” time tag, but whether market funds are willing to reinvest at the current position. Until this point is clearly confirmed, narrow fluctuations may still be the main theme of this Christmas week.