Bitcoin ends 2024 on the downside – down almost 5% in December – despite another big weekly buy from MicroStrategy.
As investors look ahead to 2025, historical market data indicates that January could be a big month for Bitcoin and the rest of crypto.
According to data compiled by Coinglass, Bitcoin has historically had a very strong first quarter on average. In January, prices have increased by an average of 3.35% since 2013 – and by almost 57% in the first quarters over the same period.
But Bitcoin is not the only one to end the year on a bad note. Markets in general took a beating as the lack of a Santa rally was also felt by stocks, with the Nasdaq 100 falling about 5% since the Fed’s last policy meeting in mid -December. Bitcoin fell about 15% during the same period.
However, as Fundstrat’s Tom Lee recently pointed out, weak stocks at the end of one year don’t necessarily mean a bearish start to the following year. In fact, the data suggests the opposite.
In years where market breadth has been weak in December, January is typically a rebound month. Last week, just 18% of NYSE stocks rose, the lowest number ever recorded for the last three days of the year in the last 65 years. As Lee also points out, the futures yields of the 12 worst year-end market breadth readings since 1962 amount to a median gain of around 5% in subsequent January readings, with a rate of 75% success rate.
In this case, weakness through the end of 2024 could mean strength for stocks and, by extension, potentially for Bitcoin in the new year.
Perhaps this is why MicroStrategy continues to buy Bitcoin’s dip. The company announced that it added an additional $209 million in Bitcoin to its coffers, bringing its total holdings to 446,400 BTC, or nearly $42 billion.
