Bitcoin Payments Hit Yearly Low Amid Holiday Illiquidity, But Analysts Expect Recovery

As the holiday season winds down, Bitcoin’s payment activity has dropped significantly, hitting a yearly low. The reduced trading volume and weaker social sentiment reflect the typical illiquidity of the period, but analysts are predicting an imminent price recovery as investor activity picks up post-holidays.

Bitcoin Payments Sink to Yearly Low

On December 26, 2024, Bitcoin’s confirmed payments fell to 623,434, marking the lowest point of the year, according to data from Blockchain.com. These confirmed payments represent transactions that have been accepted and included in a blockchain block, making them irreversible. This decline in Bitcoin transactions is a sign of the typical seasonal slowdown, as investor activity tends to dip during the holiday period.

For context, just a week earlier, on December 17, Bitcoin had hit a new all-time high above $108,000, and the number of confirmed payments surged to over 857,000—37% higher than the figures on December 26. This sharp contrast highlights the cyclical nature of crypto activity, particularly the dip in liquidity around the holiday season.

Bitcoin’s declining payment activity during the holiday season is not an anomaly, as the market traditionally experiences weaker liquidity at the end of the year. This phenomenon is often linked to reduced institutional participation, with many large players stepping back during this time.

Ryan Lee, Chief Analyst at Bitget Research, told Cointelegraph that the downturn in Bitcoin’s market activity is a natural symptom of this holiday illiquidity. “Post-Christmas, market activity typically picks up again, with funds expected to actively position for sectors that might benefit from Trump’s upcoming inauguration,” he said, referring to the potential market movements linked to political events.

With funds possibly looking ahead to the January 20, 2025, presidential inauguration of Donald Trump, analysts expect market volatility to resume as institutional players return to the market and reallocate assets.

Social Sentiment Signals Potential Price Recovery

Another interesting trend pointing toward a potential price recovery is the weak social sentiment around Bitcoin. On December 22, Bitcoin-related social sentiment fell to its lowest level of 2024, with negative comments dominating the online conversation. According to market intelligence platform Santiment, this “FUD” (Fear, Uncertainty, and Doubt) signals that a contrarian rebound could be imminent.

Santiment noted that retail investors are often the most vocal during periods of pessimism, and historically, Bitcoin’s price tends to move in the opposite direction of public sentiment. This “contrarian” signal suggests that, as negativity peaks, a bullish breakout could be on the horizon for Bitcoin.

Despite the recent dip, Bitcoin analysts are forecasting a price recovery as the holiday season comes to an end. Several analysts expect Bitcoin to rebound above $105,000, especially as institutional liquidity returns and market focus shifts to new catalysts in the coming weeks.

The recent three-day red candle streak on Bitcoin’s daily chart (December 20-22) is being closely watched by market participants, as it mirrors a similar correction seen in early November, which preceded a significant rally. The correction under $100,000 is being seen as part of a natural market cycle, and many experts expect it to end soon.

“Post-holiday, we expect activity to pick up, and Bitcoin’s trading range is likely to stabilize between $94,000 – $105,000 this week,” said Ryan Lee, signaling that the crypto market could be setting the stage for a rally once institutional investors return.

Key Events to Watch: Donald Trump’s Inauguration and Beyond

Looking further ahead, one of the most significant events in 2025 that could act as a Bitcoin catalyst is Donald Trump’s inauguration on January 20, 2025. While the direct impact of political events on Bitcoin is often difficult to predict, past trends show that market reactions to major political milestones can trigger shifts in investor sentiment.

Bitcoin’s price history also suggests that political uncertainty and leadership changes can influence market behavior, potentially leading to increased volatility and new price highs.

The current dip in Bitcoin’s payment activity and social sentiment reflects the typical seasonal lull experienced during the holidays. However, Bitcoin’s underlying fundamentals and the return of institutional liquidity in the new year suggest a strong likelihood of a price recovery in the coming weeks.

With analysts expecting a bounce back above $100,000 as early as the end of December, and the potential catalyst of Donald Trump’s inauguration in January, Bitcoin’s outlook remains positive despite the current downturn.