It’s “Altcoin Season”: Ethereum, Ripple and Solana rise in December’s Santa Claus Rally
The crypto market is booming before the Christmas holidays. We track the performance of major cryptos, zeroing in on the Santa Rally phenomenon.
The traditional "Santa Claus rally" in the stock market, attributed to increased holiday spending and end-of-year trading, often influences the crypto market as well. However, for digital assets, it seems the Santa Rally appears to have arrived early this year, with crypto markets already rising.
This rally has been driven by a combination of political, regulatory, and seasonal factors, paving the way for a potentially historic December. Let’s look at what drove this bullish wave and what we might expect as the New Year approaches.
Factors driving crypto's bullish surge
The election of a pro-crypto president
The recent US election marked a watershed moment for the cryptocurrency sector, as the country elected its first pro-crypto president. This leadership transition has generated excitement, especially given the president’s stated aspirations of making the US a leader in cryptocurrency and even accumulating Bitcoin reserves.
Adding to this enthusiasm are the appointments of pro-crypto figures to key positions, including Howard Lutnick as Secretary of Commerce, Scott Besent as Treasury Secretary, Paul Atkins as SEC Chair, and David Sacks as White House AI and Crypto Czar. These appointments speak to a possible trend towards more crypto-friendly rules, which will enhance investor confidence even further.
Read all about the role of crypto in the 2024 US election.
The Thanksgiving effect on crypto markets
The crypto market has usually been volatile around Thanksgiving, owing to the so-called "Thanksgiving Effect." As families gather, discussions about crypto investments often spark fresh interest, potentially driving new waves of retail investment.
The weekend after Thanksgiving on November 28, 2024, saw a perfect storm of positive developments, propelling the crypto market into a bullish phase. Bitcoin resumed its upward trajectory, nearing $104,000, while altcoins rose, signalling the possible arrival of what traders call "Altcoin Season"—a period of increased interest and price appreciation in cryptocurrencies other than Bitcoin.
Legal victories for the crypto market
Recent legal victories have helped fuel the crypto market rally. A US court ruled sanctions on Tornado Cash, a decentralised privacy protocol, unconstitutional, boosting confidence in decentralized finance (DeFi). This win led to gains in ETH and Ethereum-linked tokens like UNI.
Additionally, the resignation of crypto’s long-time nemesis, SEC Chair Gary Gensler, who had been aggressively pushing to classify numerous altcoins as securities, seemed to restore investor confidence and drive up the prices of many cryptocurrencies, particularly XRP.
Discussions about eliminating capital gains taxes on cryptocurrencies issued by US-registered companies have further strengthened the market's momentum.
December's historical performance
December has historically been a healthy month for cryptocurrencies, with roughly 60% of December recording positive returns. Bitcoin has averaged a 9.6% return during this month. Notably, years following Bitcoin's halving events, such as 2024, have a perfect record for price gains in December.
This historical context, combined with current market dynamics, makes a compelling argument for ongoing bullish momentum during the holiday season.
The return of altcoin season
Investors focused solely on Bitcoin may be missing out on significant opportunities in the altcoin market. With favourable macroeconomic and regulatory conditions, altcoins have achieved spectacular returns in the last two weeks, securing their spot in this year's Santa Rally.
While the rally is promising, traders are advised to remain cautious, as crypto markets are notoriously volatile. Despite potential pullbacks, the overall trend suggests a festive season that could reward savvy investors.
To illustrate, consider the performance of a few key cryptocurrencies during the first half of December:
Asset |
14d % |
YoY % |
Current price |
ATH |
% to ATH |
Ethereum (ETH) |
52% |
76% |
$3,916 |
$4,878 |
25% |
Ripple (XRP) |
53% |
285% |
$2.34 |
$3.40 |
47% |
Solana (SOL) |
-5% |
214% |
$226 |
$263 |
16% |
Dogecoin (DOGE) |
2% |
336% |
$0.41 |
$0.73 |
81% |
Cardano (ADA) |
5% |
82% |
$1.10 |
$3.09 |
181% |
Uniswap (UNI) |
38% |
240% |
$17.40 |
$44.92 |
158% |
Aave (AAVE) |
87% |
315% |
$370 |
$662 |
77% |
Ethereum (ETH)
Ethereum experienced significant volatility in 2024. Despite a 73% year-to-date increase, its performance has lagged behind both Bitcoin and other smart contract platforms. Notably, Solana has gained investor interest, outpacing Ethereum's growth.
Ripple (XRP)
After fluctuating between $0.41 and $0.73 for most of 2024, XRP experienced a remarkable surge in November and December. Fuelled by regulatory clarity and growing institutional interest, the cryptocurrency soared 450% to reach $2.90 in December. While it has since pulled back to $2.34, XRP remains the third-largest crypto by market cap. With its previous all-time high of $3.84 set in January 2018, XRP seems determined to challenge this level once again.
Solana (SOL)
Solana made a remarkable recovery from its previous cycle low, establishing itself as the cycle’s darling. Following the collapse of the failed FTX exchange (which was heavily invested in SOL), SOL fell to a low of merely $8 on Christmas 2023. SOL gained over 3000% to make a new all-time high of $264 in late November 2024, before a relatively modest pullback. The affordability of NFTs on Solana compared to Ethereum has attracted a broader audience, including some who may have been priced out of the Ethereum NFT market.
Dogecoin (DOGE)
Dogecoin, supported and influenced by Elon Musk, has received increased attention following Trump's election victory. Musk’s appointment to oversee a government office named D.O.G.E. after Dogecoin has further intertwined the meme cryptocurrency with political narratives, impacting its market perception and value. At $0.41, it is still 81% (or perhaps just a tweet away) from its previous ATH of $0.73.
Cardano (ADA)
Cardano (ADA) has surged 240% since the US elections, reaching $1.10, its highest level since April 2022. This growth is fuelled by speculation surrounding founder Charles Hoskinson’s potential influence on US cryptocurrency policy under the Trump administration.
Uniswap (UNI)
Uniswap, a leading decentralised exchange, has proven resilient in 2024, despite regulatory challenges. Its token price ranged between $5.40 and $18.63, which, while lower than its previous all-time high of $44.92, suggests potential upside. Recent positive court rulings have boosted confidence in DeFi and Ethereum-linked tokens such as UNI, which could raise investor interest.
Aave (AAVE)
Aave (AAVE), a leading decentralized finance (DeFi) lending protocol, has outperformed in the recent post-Thanksgiving rally, rising by 87%. This remarkable growth can be attributed to a variety of factors, including strong user engagement and robust liquidity. Recent whale activity as well as a strategic partnership with the market-making platform Balancer have fuelled its momentum. Notably, Donald Trump's World Liberty Financial Initiative (WLFI) investments in AAVE have renewed investor interest and increased confidence in the protocol.
Final Thoughts: A Bullish End to 2024?
The crypto market’s early Santa Rally has been supported by political shifts, legal victories, and seasonal trends. As we move into the new year, these factors may continue to drive the market forward. For traders, the key will be balancing optimism with careful risk.
It's a busy time of the year – How can I trade the Santa Rally?
- Login to your live MT4 trading account.
- Navigate to market watch, right click and select ‘show all’. Search for a market.
- Choose your position and size and go long or short on share prices. Don’t forget to set risk management tools like a stop loss and take profit order.
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Sources: ChainCatcher, CoinGoLive, CoinMarketCap
This information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. It has been prepared without taking your objectives, financial situation, or needs into account. Any references to past performance and forecasts are not reliable indicators of future results. Data is sourced from third party providers. Axi makes no representation and assumes no liability regarding the accuracy and completeness of the content in this publication. Readers should seek their own advice.
