Markets are now focused on whether bitcoin can sustain its key support levels into the new year, after December’s failed rally raised fresh doubts about the market’s resilience.
Bitcoin and ether closed out December without delivering the year-end surge traders typically expect, capping a quarter that highlighted how quickly crypto momentum can falter as liquidity thins and risk appetite recedes. The widely anticipated “Santa rally” never took hold. Instead, repeated attempts by bitcoin to reclaim important technical levels were met with selling pressure, dragging ether and other large-cap tokens lower.
Bitcoin is on track to finish December down roughly 22%, its worst monthly performance since December 2018. Ether, meanwhile, is set to close the fourth quarter of 2025 down 28.07%, according to data from CoinGlass.
The Santa rally refers to a seasonal pattern in which markets often rise in the final week of December and early January, typically supported by thin liquidity, year-end portfolio rebalancing, and positive holiday sentiment. This year, however, December trading activity looked more like a broad de-risking phase than the start of a new upswing.
That weak close matters because crypto markets have historically depended on strong late-year inflows to establish momentum for the early part of a cycle. With bitcoin’s fourth-quarter performance turning decisively negative, price action now reflects a risk-off environment rather than renewed appetite for risk.
The contrast with precious metals has been stark. Gold has climbed to record highs on expectations of interest-rate cuts and heightened geopolitical tensions, while silver has rallied sharply and platinum has also reached new highs, as previously reported by CoinDesk. Continued central bank buying and rising ETF inflows have reinforced gold’s role as a defensive hedge during periods of uncertainty.
Bitcoin, by comparison, has traded more like a high-beta asset. Even as the macro backdrop increasingly points toward easier monetary policy, the cryptocurrency has struggled to hold gains without broader participation from risk assets.
That pattern has defined much of late 2025, with rebounds quickly sold into, leverage pared back during the holidays, and U.S. trading hours often seeing the heaviest selling as funds reduce exposure. Volatile bond yields and a choppy dollar have kept investors focused on capital preservation — an environment that tends to favor gold before more speculative assets.
The next key test will be whether bitcoin can hold its recent support zones as the new year begins. If those levels give way, the abandoned Santa rally may come to be viewed as an early warning that the market still needs a deeper reset before a sustained advance can take hold.
