US Bitcoin Session Leads December Returns After Weak November

Overview

In December, Bitcoin has shown significant gains during the US trading session, marking a notable contrast to its performance in November. Following a period of negative returns in the American market, the cryptocurrency has seen a resurgence, which could indicate a shift in investor behavior.

Bitcoin’s Performance in December

Recent data reveals that Bitcoin has experienced a substantial increase in returns during the US trading session throughout December. According to a post by a community analyst from CryptoQuant, the trend has shifted positively for Bitcoin, particularly in the American market. The analysis emphasizes that Bitcoin and other blockchain-based assets operate continuously, but trading activity typically spikes during the daytime hours of major markets.

In the last weeks of November, Bitcoin’s cumulative returns were negative during the US trading session, while the European and Asia-Pacific markets exhibited only slightly better performance, hovering near neutral returns. However, a significant change began to emerge toward the end of November, with US trading hours seeing an uptick in returns. So far in December, this trend has continued, with cumulative returns for Bitcoin during the US session reported at a positive 8%. In contrast, the returns from the European and Asia-Pacific sessions have remained negative, around -4% or lower.

This shift suggests that American investors have been actively accumulating Bitcoin in December, while investors in other regions appear to be distributing their holdings or refraining from purchasing. The analysis indicates a potential divergence in trading behavior among global investors, with US participants taking a more bullish stance on Bitcoin.

Key Insights on Market Activity

In addition to the performance metrics, there have been notable developments regarding Bitcoin’s on-chain indicators. A significant selloff in November led to a drastic change in a key on-chain metric, the Realized Price of Bitcoin short-term holders. This indicator tracks the average cost basis of investors who entered the market within the last 155 days. The data shows that the Realized Price for short-term holders saw a marked decline, aligning with the price drop experienced in November.

The capitulation of these short-term holders was pronounced, resulting in the largest negative change in the 7-day average of the Realized Price since the FTX crash in November 2022. This trend indicates that many investors who had purchased Bitcoin at higher price levels were forced to adjust their expectations, selling at lower prices following the market downturn.

From author

The contrasting performance of Bitcoin in December compared to November raises questions about investor sentiment and market dynamics. The positive returns during the US trading session may reflect a renewed interest among American investors, while the negative returns in other regions could suggest a more cautious approach. Understanding these trends is crucial for assessing the overall health of the Bitcoin market and the potential implications for future price movements.

Impact on the crypto market

• The positive performance of Bitcoin in the US trading session may indicate increased investor confidence and potential accumulation.
• Divergent trading behaviors across different regions may impact market liquidity and volatility.
• The substantial decline in the Realized Price for short-term holders highlights the challenges faced by newer investors during market downturns.
• The current trends could influence trading strategies and risk assessments among both retail and institutional investors.
• If the accumulation trend continues, it may lead to upward price pressure on Bitcoin in the near term.