Cryptocurrencies Show Strength Despite US Market Downturn
- SP 500 starts Santa Rally with low volatility.
- Thematic ETFs face significant losses in 2024.
- Bitcoin struggles to overcome $102.734 barrier.
The US stock market is heading towards a modest year-end performance, leaving investors cautious regarding the possibility of the traditional Santa Rally still taking place. This period, which includes the last five trading sessions of December and the first two of January, historically provides a boost to the markets, but performance so far has been lukewarm.
The SP 500 index posted an initial 1,1% gain on Tuesday but quickly lost momentum, falling 0,04% on Thursday. Today’s forecasts point to another pullback, with a 0,4% drop expected at the open. Since 1950, the Santa Rally has averaged returns of 1,3%, far higher than the typical 0,3% gain in seven days. But uncertainty reigns supreme this year.
LPL Financial’s Adam Turnquist noted that a successful rally in this time frame is usually indicative of stronger gains to come, with the SP 500 returning an average of 1,4% in January and 10,4% for the year. However, so far, the much-anticipated rally “magic” has not materialized.
Furthermore, the performance of the ETF market has been a rollercoaster. Thematic funds, which capture specific trends such as cloud computing or renewable energy, faced massive outflows in 2024, with a total of $6,5 billion withdrawn. Among them, the ARK Innovation ETF led the losses, with almost $3 billion. However, the QTUM ETF, focused on quantum computing, surprised by attracting $260 million in December.
Meanwhile, South Korea’s entertainment market took a hit as Netflix’s second season of “Squid Game” failed to replicate the success of its debut. Stocks linked to the series, including Artist United, Wysiwyg Studios and Dexter Studios, all suffered significant declines, reflecting disappointment among audiences and investors.
In the cryptocurrency space, Bitcoin has seen remarkable growth over the year, now trading close to $96.000, but with resistance to breaking through the psychological level of $102.734. This technical barrier could define the market's next moves, with analysts keeping an eye on support at $81.500 and $67.700 if a larger pullback occurs.
Signs of recovery in the crypto market are also translating into new job opportunities, with blockchain companies hiring aggressively, following the industry’s revival following the collapse of FTX.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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