It’s that strange time of year again. The holidays are right around the corner, markets are thinning out, and everyone in crypto is asking the same question: will we finally get that fabled Christmas rally, or is Bitcoin about to roll over one more time?
As I write this on December 23, 2025, Bitcoin is hovering just shy of $88,000, down a couple percent on the day and looking decidedly stuck. It’s been bouncing in this range for what feels like forever, unable to reclaim the territory it lost weeks ago. Honestly, watching the chart lately has felt a bit like déjà vu – and not in a good way.
The Big Picture: A Broken Bull Channel
For almost two years, Bitcoin rode comfortably inside a broad ascending channel that defined the entire bull market. It was clean, reliable, and gave traders plenty of confidence. Then, about six weeks ago, price decisively broke below the lower boundary. Since then, we’ve seen three separate attempts to climb back inside – each one rejected harder than the last.
That former support line has now flipped into stubborn resistance. Every time bulls push toward it, sellers step in and swat the price right back down. It’s textbook technical behavior, but that doesn’t make it any less frustrating for anyone holding bags and hoping for a year-end sprint higher.
Right now, we’re consolidating just underneath that line again. A fourth test feels inevitable. The question on everyone’s mind is simple: will this be the charm, or are we setting up for something uglier?
Echoes of 2021: The Rounded Top Pattern
If you pull up the charts from late 2021, you’ll see something uncomfortable. Bitcoin formed a classic rounded top, broke down sharply, bounced for a corrective rally, and then rolled over again into a multi-month bear market. Fast forward to today, and the structure looks disturbingly similar.
We’ve had the breakdown from the channel, the quick dump, the hopeful bounce, and now renewed selling pressure right into the same zone. Some analysts are pointing out that the current retest level aligns almost perfectly with key support from that previous cycle. Back then, losing it led to a painful drawdown.
Of course, history doesn’t repeat exactly, but it sure rhymes sometimes. In my experience watching these markets, when price keeps failing at the same spot, it usually means distribution is happening behind the scenes. The path of least resistance can shift quickly once momentum tips.
When a major trend channel breaks and multiple retests fail, it’s often a sign that the larger structure has changed. Traders ignore that at their peril.
– Veteran chart analyst
Hashrate Drop: Bottom Signal or Just Noise?
One potentially bullish counterpoint came recently from VanEck. They highlighted a roughly 4% decline in Bitcoin’s network hashrate through mid-December. Historically, meaningful hashrate drops have coincided with local or major market bottoms as less efficient miners capitulate.
It’s tempting to see this as a classic “capitulation” indicator. When miners turn off rigs, it often marks the point where selling pressure finally exhausts itself. We’ve seen this play out before, and the data does line up reasonably well with past cycles.
That said, I’d be cautious about reading too much into it just yet. Hashrate can fluctuate for all sorts of reasons – energy costs, seasonal factors, new hardware deployments. Without clear price confirmation, it’s just one piece of the puzzle. The real test remains how Bitcoin reacts at current levels.
- Hashrate drops have preceded bottoms in previous cycles
- Current decline is modest at around 4%
- Needs price follow-through to confirm capitulation
- Miners may simply be optimizing ahead of holidays
The Christmas Rally Myth: What History Really Shows
Every December, the same narrative pops up: Santa Claus rally incoming. Traders start dreaming of fat green candles while eggnog flows and markets close early. But let’s take an honest look at the data.
Since 2013, Bitcoin has actually closed December in the red more often than green – seven down months versus five up. The average return sits around +4%, which sounds nice until you realize it’s heavily skewed by a couple massive years (especially 2020).
Strip out the outliers, and recent holiday periods look far less impressive. The past few years have delivered either tiny gains or outright losses. Volume tends to dry up, volatility spikes in both directions, and moves can be brutal rather than gentle.
Perhaps the most interesting aspect is how bimodal December performance really is. You either get explosive upside or sharp drawdowns – rarely anything in between. That makes betting on a “Santa rally” feel more like gambling than edge.
| Year | December Return | Notes |
| 2013-2019 avg | Mixed | Big swings both ways |
| 2020 | +47% | Massive outlier |
| 2021 | -19% | Post-top pain |
| 2022 | Flat | Bear market low |
| 2023-2024 | Modest gains | Nothing dramatic |
The bottom line? Treating December seasonality as a reliable bullish trigger has become increasingly questionable. Low liquidity around holidays can amplify moves, but direction remains anyone’s guess.
What Bulls Need to See Next
If you’re rooting for higher prices – and let’s be honest, most of us are – there are a few key developments worth watching closely over the coming days.
First and foremost, a convincing break and close above the broken channel line would flip the script. It wouldn’t guarantee new all-time highs immediately, but it would invalidate the bearish breakdown and likely trigger short covering.
Second, volume matters hugely here. Any upside resolution on thin holiday trading would raise eyebrows. Real conviction needs participation – rising volume on green candles, falling volume on pullbacks.
Finally, broader market context can’t be ignored. Risk assets have been choppy lately, and Bitcoin often follows general sentiment during low-liquidity periods. A sudden equity sell-off could drag crypto lower regardless of technical setup.
- Daily/weekly close above channel resistance
- Increasing volume on upside moves
- Stable or improving risk appetite in traditional markets
- Potential hashrate stabilization or rebound
The Bear Case: Why Caution Makes Sense
On the flip side, there are plenty of reasons to stay defensive heading into year-end. Six weeks below a major trend channel is nothing to brush off. Failed retests tend to precede larger corrective phases rather than immediate reversals.
Some traders are watching for a bearish weekly pennant formation that, if confirmed, could target significantly lower levels. Combined with fading momentum indicators and overbought readings from earlier in the year, the setup certainly allows for more downside.
I’ve found that when price keeps knocking on the same door and getting rejected, eventually the sellers win out. Patience is key, but so is risk management. No one ever went broke taking profits or sitting in stablecoins during uncertainty.
The market can remain irrational longer than you can remain solvent. But when technical damage is this clear, respecting it usually pays off.
Where Do We Go From Here?
Truthfully, nobody knows for sure. That’s what makes markets both exciting and infuriating. Bitcoin could rip higher tomorrow on nothing more than holiday cheer and short squeezes. Or it could quietly grind lower as participants head off for vacation.
What seems clear is that we’re at an inflection point. The reaction over the next week or two will likely set the tone for early 2026. A successful reclaim of the bull channel would breathe new life into the uptrend. Another rejection could open the door to deeper correction.
My personal take? I’m staying flexible. The technical damage is real, and seasonality isn’t the slam-dunk edge it once seemed. But capitulation signals like the hashrate drop remind us that selling exhaustion often arrives when least expected.
Either way, volatility feels likely. Buckle up, manage risk, and maybe keep some dry powder ready. Whatever happens, 2025 has already delivered plenty of drama – and we’re not done yet.
At the end of the day, Bitcoin’s story is still being written. Moments like these – stuck between hope and technical reality – are exactly when the next big move often begins. Whether you’re bullish, bearish, or just along for the ride, staying informed and disciplined remains the best approach.
Here’s to an interesting finish to the year. May your stops be tight and your conviction well-placed.
