Bitcoin and ether wrapped up December without the anticipated year-end surge that traders typically expect, culminating in a quarter that highlights the fragility of crypto rallies, especially when liquidity diminishes and risk appetite wanes.
The much-expected ‘Santa rally’ failed to materialize. Instead, bitcoin’s repeated attempts to regain crucial levels were met with selling pressure, while ether and major altcoins also declined.
Bitcoin is poised to finish December with a decline of about 22%, marking its worst monthly performance since December 2018. Meanwhile, ether is set to conclude Q4 2025 down 28.07%, according to data collected by CoinGlass.
A ‘Santa rally’ refers to the tendency for markets to rise during the final week of December and into early January, often fueled by thin liquidity, year-end portfolio adjustments, and positive holiday sentiments.
This weak finish is significant as crypto has historically depended on strong late-year inflows to build momentum for early cycles. This December, however, resembled a positioning reset instead of signaling the beginning of a new upward trend.
With bitcoin’s Q4 performance turning sharply negative, the quarterly narrative now favors risk-off behavior rather than risk-on sentiments.
The disparity with precious metals has been quite evident.
Gold has soared to new records amid expectations of interest rate cuts and geopolitical tensions, while silver has risen significantly, and platinum has also reached fresh highs, as noted by CoinDesk.
The yellow metal has attracted steady central bank demand and increased ETF allocations, reinforcing its position as a reserve-style hedge during uncertain times.
In contrast, bitcoin has acted more like a high-beta asset. Even when macro conditions suggest looser policies, bitcoin has found it hard to maintain gains without a broader appetite for risk.
This pattern has become routine in late 2025, with price rebounds often followed by swift profit-taking. During the holidays, leverage has been reduced, and significant selling has typically occurred during U.S. trading hours as funds adjust their positions.
Fluctuating yields and a volatile dollar have kept investors focused on capital preservation, a scenario that tends to prioritize gold first and speculative assets later.
The initial challenge will be whether bitcoin can sustain its recent support levels as the new year begins. Should it fail to do so, the unfulfilled Santa rally might serve as an early indicator that the market requires a more substantial reset before embarking on the next meaningful uptrend.
