A classic Wall Street seasonal pattern could offer some relief to battered Bitcoin bulls as the year draws to a close.

Bitcoin (BTC $87,972.47) has faced its toughest fourth quarter since 2022, but optimism could emerge from a well-known stock market trend: the Santa Claus rally. This phenomenon typically occurs during the last five trading days of December and the first two of January, historically providing a boost to equities. If the pattern repeats this year, it could improve sentiment in the bitcoin market.

Since 2005, the S&P 500 has recorded gains during the Santa Claus rally period 15 times, losing only five times and averaging a 0.58% return, according to The Market Stats. Extending the dataset to the 1950s, the index has risen 77% of the time and never declined three years in a row during this window. While it dipped in the last two Santa periods, the overall historical odds favor a rally into the new year.

For bitcoin, the connection between equities and crypto has grown stronger with increasing institutional adoption through ETFs. A festive rally in stocks could therefore spill over into bitcoin and the broader crypto market. BTC’s own Santa Claus rally record is mixed. The cryptocurrency posted strong gains of 33% and 46% in 2011 and 2016, respectively, but suffered declines of 14% in 2014 and 10% in 2021. Overall, BTC has averaged a 7.9% return during this period since 2011, when the market was smaller and dominated by early adopters.

Gold shines

Gold has been a standout performer over the same period. TheMarketStats notes that gold has delivered a cumulative 95% return during Santa periods, with only 2023 posting a slight negative result since 2005. The precious metal recently reached all-time highs above $4,400 per ounce, hinting at a potentially positive holiday season.

Overall, while gold trades at record levels and the S&P 500 sits just 1.5% below its own peak, bitcoin remains roughly 30% below its all-time high, leaving room for potential upside if equity and gold seasonal trends translate into renewed crypto optimism.