Crypto Markets Poised for ‘Santa Rally’ as Fed Moves Reignite Bitcoin Volatility Bets

Bitcoin Eyes Year-End ‘Santa Rally’ as Accumulation Grows and Policy Hopes Lift Sentiment

Analysts see renewed positioning, potential stimulus, and easing liquidity as setup for December’s seasonal upswing.

Bitcoin’s sluggish October may be giving way to a familiar year-end pattern — the so-called “Santa Claus rally,” which has historically driven crypto prices higher through December’s lighter trading sessions.

Data from Coinglass shows Bitcoin ending six of the past eight Decembers in positive territory, with gains between 8% and 46%, underscoring a consistent seasonal tailwind.

“We’re seeing a clear transition from panic selling to strategic accumulation among long-term holders,” said Nick Ruck, director at LVRG Research. “Combined with expectations of Fed rate cuts and steady institutional inflows, that creates favorable conditions for a robust Santa rally.”

The December phenomenon — driven by investor optimism, tax-related rebalancing, and thin liquidity — often leads to stronger momentum in risk assets, including crypto, as traders position ahead of the new year.

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Liquidity Watch: Trump’s ‘Tariff Dividend’ Proposal

Analysts also flagged a potential macro catalyst in President Donald Trump’s recent proposal for a $2,000 “tariff dividend” stimulus check alongside a new 50-year mortgage plan aimed at improving housing affordability.

“The idea mirrors COVID-era stimulus checks that fueled risk-asset rallies,” said Augustine Fan, head of insights at SignalPlus. “The ‘tariff dividend’ injects liquidity directly into the economy, while ultra-long mortgages expand credit capacity — both forms of monetary easing that tend to lift market sentiment.”

Fan noted that markets are already pricing these measures as liquidity-positive, with risk assets reacting accordingly.

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New Volatility Regime Emerging

While traders anticipate a seasonal bounce, some analysts believe Bitcoin’s volatility profile is evolving — less tied to retail speculation, and more to institutional liquidity dynamics.

“Bitcoin’s volatility will likely stay structurally elevated in 2026, but for different reasons,” said Rachel Lin, CEO of SynFutures. “We’re seeing maturity in the volatility cycle — driven by institutional flows, derivatives markets, and global liquidity rather than hype cycles.”

Lin highlighted Bitcoin’s 0.6–0.7 correlation with U.S. liquidity indicators such as the Fed’s balance sheet and M2 money supply. “If global central banks tighten policy to counter tariff-driven inflation — a risk flagged by the IMF and BIS — price swings could accelerate again,” she added.

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Accumulation Builds as Whales Trim

Bitcoin (BTC) has fallen about 3% in November, extending October’s weakness, but on-chain trends show smaller holders steadily accumulating even as large wallets continue to distribute.

Addresses holding over 10,000 BTC have been net sellers for three months, unwinding positions built during the first-quarter ETF inflows. Meanwhile, wallets with under 1,000 BTC have increased their holdings, softening sell-side pressure.

With smaller investors stepping in and policy-driven liquidity potentially expanding, analysts say Bitcoin could again follow its seasonal playbook — turning late-year skepticism into a December rally fueled by optimism and easing conditions.

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