These top cryptocurrencies are seeing increasing selling pressure after Christmas.
A so-called Santa Claus Gathering Rounding a financial year is a phenomenon that many hope to happen in the crypto world. So far, the 24-hour movements observed in Bitcoin (BTC 0.98%), Ethereum (ETH 1.77%) And Dogecoin (DOGE 1.01%) indicate that such a recovery towards the end of the year may take longer to materialize, or may not materialize at all. These tops cryptocurrencies are each down 3.6%, 4.6% and 5.7%, respectively, over the past 24 hours, as of 2:30 p.m. ET.
Very low trading volumes in stocks and other assets are common during the holidays, and there is a similar phenomenon in the crypto world. That said, today’s selling pressure was notable and once again took Bitcoin below the key $100,000 threshold, with Ethereum continuing to hover around $3,300 and Dogecoin trading at around 0 $.31.
Let’s take a look at what’s driving the current price action of these top digital assets.
No Santa gathering?
On very low volume, one cannot expect to see much volatility. For stocks, this is the case today.
However, some interesting commentary on the possibility that higher interest rates are now starting to hurt risky assets (including cryptocurrencies) is causing some investors to rethink their core investment thesis around this class of assets. assets. The question for Bitcoin holders is whether this asset is a store of value (like digital gold) or whether it is more of a risk asset. I think opinion is not yet clear on this point, with some investors clearly seeing rising interest rates as having a negative effect on capital flows into more speculative or risky assets, with capital flowing instead into safer assets to complete the year.
From a speculation and trading perspective, it also appears that long derivative contracts are seeing strong liquidation activity, suggesting that leveraged bets on these three tokens in particular, which have been increasing in a short period of time , are currently being resolved. The effects of such leverage within the crypto ecosystem can be significant on the upside, but this volatility can prove to be a double-edged sword, with large downward price swings possible even on days where the trading volume is relatively low.
As the dollar remains very strong and capital continues to flow out of most asset classes (including gold) in recent weeks into money market funds, it is entirely possible that Santa has the intends to give all crypto investors a lump of coal over the next week. We’ll see.
What does 2025 have in store for us?
One thing I’ve learned is that it’s impossible to predict with certainty how any particular asset class will perform in the very short term. However, for most assets, the long-term trajectory tends to be bullish. And while crypto as an industry has only been around for about 15 years, you only need to look at the long-term chart of a token like Bitcoin to get the idea that compounding can take place for a long, long time.