Bitcoin is ending 2024 on a downward skid — falling nearly 5% in December — despite yet another big weekly purchase from MicroStrategy.
As investors turn the calendar into 2025, historical market data indicates January could be a big month for Bitcoin and the rest of crypto.
According to data compiled by Coinglass, Bitcoin has historically averaged a very strong first-quarter. Price in January has advanced an average of 3.35% since 2013 — and by nearly 57% in first quarters over the same time frame.
But Bitcoin is not alone in ending the year on a bit of a rough skid. Markets in general have been beaten down as the absence of a Santa Claus rally was felt in stocks as well with the Nasdaq 100 falling by about 5% since the Fed’s last policy meeting in mid-December. Bitcoin fell by about 15% over the same stretch.
However, as Fundstrat’s Tom Lee recently noted — weakness in stocks to end a year doesn’t necessarily mean a bearish start to the following year. In fact, data hints at the opposite.
In years where market breadth has been weak in December, January is usually a bounce-back month. This past week, only 18% of NYSE stocks advanced, which was the lowest-ever reading for the final three days of the year in last 65 years. As Lee also flags, forward returns from the 12 worst readings of market breadth at year-end since 1962 amount to about a 5% median gain in the following January readings at a 75% win-rate.
In this case, weakness to end 2024 could mean strength for stocks, and by extension, potentially Bitcoin in the new year.
Perhaps that’s why MicroStrategy continues to buy the Bitcoin dip. The company announced it had added another $209 million in Bitcoin to its coffers, bringing its total holdings to 446,400 BTC or nearly $42 billion.
