"What leads to this phenomenon: individual traders or large investors? In the current market, which includes drivers like exchange-traded funds (ETFs), institutional flows and online traders, understanding the dynamics behind the Santa Rally becomes even more important. This article explains what the Santa Rally is and how holiday periods influence investor behavior among both retail and institutional participants. It explores when each group tends to dominate trading and how to read the indicators that shape the rally."
"This pattern is no longer limited to stocks. Major cryptocurrencies also tend to perform well in late December, supported by renewed investor interest, reduced activity from large institutions and new funds entering the market at the start of the year. Solana ( SOL), for instance, traded at $56 on Dec. 24, 2023, and rallied to $105 by Jan. 5, 2024."
Late-December and early-January often produce outsized market gains known as the Santa Rally, traditionally the last five trading days of December and first two of January. The S&P 500 has historically risen during this window most years since the 1950s. The phenomenon has expanded to major cryptocurrencies and gold, driven by end-of-year optimism, low trading volumes, reduced institutional activity, fresh funds entering at year start, and increased retail risk appetite. Market drivers now include ETFs, institutional flows and online traders, making it important to identify when retail or large investors dominate trading and which indicators signal the rally.
Read at Cointelegraph
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