The festive Christmas week has arrived, and Bitcoin holders are eagerly anticipating whether the market will experience a final surge before the year concludes.
As market anxiety diminishes and liquidity gradually recovers, some experts suggest that Bitcoin might enjoy a short-lived rebound despite an otherwise uncertain market landscape.
Reduced Market Fear May Boost Bitcoin
A promising indicator for Bitcoin is the significant decline in market volatility. The VIX index, commonly known as the fear gauge, has dropped to its lowest point in 2025. When fear subsides, investors tend to be more inclined to take risks.
Ben Emons, who leads FedWatch Advisors as Founder and CEO, believes this scenario could foster a brief rally for Bitcoin.
“Towards year-end, if liquidity returns to the markets, Bitcoin typically shows stronger performance,” Emons explained.
Bitcoin Trails Behind Gold
While gold prices have surged to new record levels recently, Bitcoin has lagged behind. This divergence prompts some analysts to think there is potential for Bitcoin to close this gap soon.
Emons points out that since Bitcoin’s performance has been weaker compared with gold’s rise, it might present an opportunity for gains late in the year if investor sentiment improves.
The Federal Reserve’s Liquidity Moves Are Crucial
The direction of markets continues to be heavily influenced by actions from the Federal Reserve. Recent economic reports from the U.S. indicate robust growth alongside inflation hovering near 2.9 percent.
Given that inflation remains somewhat elevated, cautious steps regarding interest rate reductions are anticipated from the Fed. Nevertheless, Emons expects multiple rate cuts next year which could provide support for riskier assets like Bitcoin.
In the nearer term though, uncertainty about Fed policies may create hesitation among investors—particularly within bond markets.
Is a Christmas Rally Realistic for Bitcoin?
A major breakout seems unlikely at this stage; however analysts maintain that a modest “Santa rally” remains feasible if liquidity strengthens and buying activity picks up.
With low fear levels and investors seeking opportunities before year-end closes out, Bitcoin might just deliver unexpected gains during these final days of December.
The question now is whether Santa Claus will bring good tidings to bullish crypto traders or if digital currencies will remain subdued until next year begins.&