In recent years, the Christmas holiday season has been a generally positive time for US stocks. However, this year’s Santa rally seems to be at risk of being stolen by a market pullback. Despite some initial gains on Christmas Eve and Christmas Day for the Nasdaq Composite and Bitcoin, a downturn in the latter half of the week has dampened spirits for investors.
Bitcoin’s price was down over 2% for the 7-day period leading up to Christmas, with declining trade volume and a lackluster performance. Ethereum managed to see a slight uptick of 1.5% in a slow week, while other cryptocurrencies like BNB, Solana, and Toncoin experienced some gains. However, some cryptocurrencies like Fantom, Ethena, and Ondo saw significant selloffs as investors took profits following earlier gains.
The cooling off of both blockchain cryptos and tech stocks over the holiday season can be attributed to a variety of factors. Valuations were already high leading into the holidays, fueled by optimism from the US elections and the overall performance of the market. Additionally, a selloff by Bitcoin miners due to rising energy prices has impacted the market, as well as a correlation between BTC and Nasdaq stocks.
Despite the recent downturn, it’s important to remember that financial markets can be unpredictable. With three days left in the year, there is still time for markets to shift in either direction. This serves as a reminder that investing in stocks and cryptocurrencies involves risk and the importance of diversification in a well-rounded investment portfolio.
Ultimately, while the Grinch may have stolen some of the Christmas cheer from investors this year, it’s important to remain cautious and informed when navigating the ups and downs of the market. By staying informed about market trends and making strategic decisions, investors can better weather the volatility of the market and strive for long-term financial success.
