Crypto Santa Claus Rally This Christmas?

Traders often predict these two catalysts will drive crypto prices up or down in December. Is this a ‘Santa Claus rally‘ and tax loss harvesting?

The two terms are older than cryptocurrency, commonly discussed by stock traders at the end of each financial year. Just how accurate are they for making stocks or crypto price predictions?

Pentoshi On Crypto Prices Narratives

One of the most popular crypto Twitter accounts, @Pentosh1 told his followers to expect those two ‘narratives‘ in December.

Furthermore, he added Wall Street bonuses, as did many in the replies. Also not excluding the Chinese New Year as a 2023 narrative for crypto prices. Many holders around since the 2018 bear market will recall these ideas.

While he didn’t expand on that tweet thread yet this November, Pentoshi has been critical. He has been critical of this type of fundamental analysis in previous years. He says ‘just trade the charts’ and ‘what matters is the trend’.

Crypto Santa Claus Rally

Last Christmas for example, Pentoshi tweeted the image below and his comments that bad traders rely on narratives.

Investopedia explains the justification for a Santa Claus rally. It explains it as ‘general feeling of optimism and seasonal happiness on Wall Street, and the investing of holiday bonuses’.

The theory dates back to Yale Hirsch’s Stock Trader’s Almanac written in 1972. However thats not all thats happening this season of yuletide.

There is Tax harvesting. Tax loss harvesting is defined as selling assets to ‘limit the amount of taxes due on short-term capital gains. Gains which are generally taxed at a higher rate than long-term capital gains’.

Meanwhile, last December Pentoshi noted one narrative was that institutions would sell until the last business day of the month. Afterwards, the crypto markets would rally. However the Bitcoin price action was bearish at the 2021 close, with the overall macro downtrend being the deciding factor.

In July 2022 Pentoshi made an interesting prediction that more funds ‘will blow up.‘ This is the kind that focus on these type of crypto price narratives. Russian Oligarchs, Tax harvesting, etc. Most of these narratives came from the same VCs, TradFi guys. And funds that blew up or will blow up in a few months.

Bitcoin Prediction Following FTX Collapse

Earlier this month it emerged Sam Bankman-Fried’s Alameda Research were insolvent and lost $3.7 billion. The FTX exchange linked fund were previously imagined by many to be made up of expert traders and quants.

Heading into December, Bitcoin is trading sideways, stuck in a 2% range at the time of writing around $16,500.

Since hitting an all-time high of $69,000 on Binance, Bitcoin has crashed as low as $15,476. This is happening one year on. A 78% correction.

Well, here’s the  downside. Some analysts predict the $12-$14k level could be tested as support.

The 2019 high was $13,970. This was plotted on the Bitcoin price chart above, just above the 2018 yearly open of $13,715. Pentoshi is unsure if Bitcoin will see a capitulation event and crash that low.

He’s predicting more sideways accumulation, for an extended period of time – neither a Santa Claus rally nor tax loss selling. To the upside, some traders predict a bear market rally could take the Bitcoin price up. They predict that the coin will go as high as high as the 2021 lows for a bearish retest. The June 2021 monthly wick hit $28,805.

Cristiano Ronaldo To Release NFT

NFTs seem to be gaining more ground in popularity and involvement as the day passes. First, it was renowned artist Marina Abramovic who ventured into the NFT world two weeks ago. Now it’s the football ‘living legend’ Cristiano Ronaldo who is about to storm the NFT space. 

The footballer with the most goals in professional football inked a contract with famous crypto exchange, Binance. The multi-year partnership deal will see Ronaldo releasing his own NFT collection. Furthermore, Experts think that this deal will set the pace for other sport icons to get into NFTs. 

Expectations For Ronaldo’s NFTs

Lian Anndy, the chief digital advisor at a Mongolian Productivity Organization said that Ronaldo is a top-class current football legend. He also has hundreds of millions of followers all across social media. The most followed man on Instagram will certainly create a surge when he releases his NFT collection. “There is absolutely no doubt that this NFT will be sold out in seconds.” Anndy added.

When asked to predict an estimation of Ronaldo’s NFTs value, Lian response was quite simple. He said if there are unique pieces with special rights, a few hundred thousand will not be a problem. “This price range is taken with the current market reference for NFT and prices of Ronaldo’s collectibles,” he says.

Lian said signing big Intellectual Properties like this is also part of a bear market strategy. There is obviously a need to bring in non-crypto new blood to support the market now.

“I am also curious what the other centralized marketplaces such as Bybit for instance would do next to grab their share of the pie,” he said.

Sport Stars Getting Into NFTs

Lian responded to another query by responding that Lebron James might be the next in line to launch an NFT series.

Furthermore, the chief advisor of crypto advisory firm Acryptoverse, Raj Kapoor suspected that Binance needed this partnership with Ronaldo. He speculated that they intend to bring more value to BSC. This value will eventually lead to an increase in the NFT mart share.

When asked to estimate the value of Ronaldo’s NFTs collection, Kapoor responds emphatically. He says that estimating hypothetically is very dangerous for the market. However, he speculated that a few more zeros might end up on Ronaldo’s net worth, if this goes right.

“Ronaldo would be raking in upwards of $5 million with this new partnership and I am being conservative,” Kapoor says and predicts that “media favorite Lionel Messi, would soon be the next NFT darling.”

Kapoor says, Messi is a popular figure with an unparalleled fan following and it will not be surprising if his next big goal is in the NFT space.

How This Affects Web3 Adoption

Germany-based Aliasgar Merchant, founder of Learn Web3 With Us says launching and promotion of NFTs is an indication of the overall adoption of the web3 space, however, it might also be an under-representation of what NFTs are capable of doing.

“Predicting the kind of sales Ronaldo’s NFTs will make is a long shot, given the bearish crypto market sentiments prevalent. Previously, Snoop Dogg made around $100,000 from his NFT sale. I would predict something around that range for Ronaldo too, given the conditions of the market don’t deteriorate,” he says.

Merchant further said the trend of launching NFTs by celebrities is skyrocketing and that this is just the beginning for sports icons to join the trend.

If I had to make a guess, I would predict Neymar and Novak Djokovic would be next in line,” Merchant says.