Starting next week, we will enter the Christmas market.

In English, this is referred to as the "Santa Claus rally," which refers to the performance of the S&P 500 during the week after Christmas, specifically the last 5 trading days of the year and the first 2 trading days of the next year. Historically, 79% of the time, the Christmas rally has been upward, with the highest increase during this week being 7.4% and the highest decrease being 4.2%. The average increase is around 1.3%.

From historical experience, the Christmas rally is not just a simple seasonal statistical phenomenon but more like a barometer of market risk appetite. If the market rises as expected after Christmas and around New Year's, it usually indicates that investors are still willing to allocate to risk assets despite a lack of new macroeconomic stimulus. This confirms risk appetite at the end of the year and lays the emotional foundation for asset pricing in the new year. Conversely, it often suggests that risk appetite has not recovered, making the market more susceptible to weakness or repeated fluctuations in January and potentially longer periods.

From an institutional and seasonal perspective, on one hand, after the tax-loss harvesting completed in mid-December, funds should flow back into the market. On the other hand, during the holiday period, institutional trading activity decreases and trading volume drops, allowing a small amount of buying to push the index upwards while also suppressing short-term volatility. Additionally, year-end bonuses and automatic deductions from pensions (such as 401k) may provide support for market buying.

Looking at Bitcoin data, the turnover rate finally dropped over the weekend, indicating that the actual trading volume from real users is indeed quite low. The usual high turnover rate is likely due to changes from quantitative or high-frequency short-term investors. The changes shown over the weekend should reflect the true positions of holders. However, as we enter the Christmas rally next week, overall trading volume and turnover rates are expected to decline.

This Christmas rally is essentially an expectation for the first quarter of 2026. If under seasonal benefits, emotional vacuum, and gradually recovering liquidity, the market still fails to form a valid upward trend, it is very likely that the current high-interest rate environment is suppressing the economy, overshadowing the emotional boost brought by the holiday factors.