Cryptocurrency Market in Q4: Differences in Performance and the Failure of the Year-End Rally

The expected “Christmas rally” in the cryptocurrency market did not arrive in December, leaving Bitcoin and Ethereum with significant losses. The market clearly showed a shift towards risk-averse strategies at the end of the year. Instead of gaining momentum, major cryptocurrencies began to experience heavy selling pressure, but the difference from traditional assets like precious metals became more apparent.

The State of Bitcoin and Ethereum Over the Long Months

In December, Bitcoin declined by approximately 22%, marking its weakest monthly performance since December 2018. The situation was even worse for Ethereum, which recorded quarterly losses of 28.07% based on CoinGlass data tracking. These numbers are not just statistics—they reflect a fundamental shift in investor behavior as the year comes to a close.

Understanding these dynamics is critical. December is traditionally known as a bullish period for cryptocurrencies due to portfolio rebalancing and holiday-season liquidity. However, this cycle has changed. Instead of rising, prices tumbled due to funds creating positions and de-leveraging. This pattern indicates that investor confidence is very weak when support is needed most.

Market Dormancy and the Difference from Precious Metals

While cryptocurrencies declined, precious metals reached new heights. Gold hit high prices amid expectations of falling interest rates and geopolitical tensions. Silver also showed strong momentum, and platinum tested new record levels. This divergence is no accident—it reflects how investors view different asset classes.

Central bank purchases and growing ETF demand boosted precious metals, especially gold. In contrast, Bitcoin and other cryptocurrencies did not attain the “safe haven” status many expected. Despite positive macro signals on the horizon, risk appetite remains low. Fluctuating bond yields and currency movements have created an environment where investors prioritize capital preservation over growth.

The Real Picture: Liquidity Crunch and Year-End Positioning

The real reason for the weakness is anchored in seasonal dynamics. At year-end, trading volume generally declines, and companies withdraw positions for balance sheet considerations. Aggressive selling, particularly during U.S. trading sessions, shows that fund managers are actively cleaning house for the holiday period.

This situation highlights the structural vulnerability of the cryptocurrency market—it depends heavily on consistent risk appetite and market participation. This is different from precious metals, which have built-in demand from institutional reserves and safety considerations. In an environment of uncertainty, gold and silver naturally attract capital, while Bitcoin struggles just to maintain support levels.

The Challenge for 2026

The first challenge for Bitcoin and the cryptocurrency market is whether current support levels can hold into the new year. The end of Q4 casts long shadows over investor sentiment. The varied market responses to mixed economic signals show that crypto adoption is more difficult than supporters once believed.

The precedent of year-end rallies has disappeared in this cycle, meaning investors have adjusted their expectations. As 2026 approaches, the market will need stronger catalysts to recover from seasonal weakness and compete with the appeal of traditional safe-haven assets.