No Holiday Cheer for Crypto Markets

While stock markets enjoyed a Santa rally on Christmas Eve, cryptocurrencies got a lump of coal. Bitcoin (BTC) and its digital peers spent Christmas Day treading water, with thin holiday trading volumes keeping a lid on any festive momentum.

Here's how the major cryptocurrencies performed as of 8:35 p.m. ET on Wednesday:

Bitcoin made a run toward $88,500 early Wednesday but couldn't hold the gains, sliding back below $87,000 by evening. Trading volume told the story: it dropped 14% over the previous 24 hours as traders presumably decided spending time with family beat staring at crypto charts.

Ethereum couldn't crack the psychologically important $3,000 level, retreating to the early $2,900s overnight. XRP and Solana posted similar declines, while Dogecoin led the losses among major tokens with a 3.25% drop.

Liquidations and Fear Dominate

The market pain extended beyond simple price declines. According to Coinglass data, over $138 million in positions were liquidated from the cryptocurrency market in the past 24 hours, with the majority coming from long liquidations. That suggests bullish traders got caught leaning the wrong way.

Adding to the bearish signs, Bitcoin's open interest fell 0.94% over the same period. The Long/Short ratio indicated that short positions for the leading cryptocurrency exceeded longs, showing traders betting on further declines.

The Crypto Fear and Greed Index continued to flash "Extreme Fear," reflecting the nervous sentiment pervading the market. When even holiday optimism can't budge that needle, you know traders are genuinely spooked.

Not everyone suffered, though. A handful of smaller cryptocurrencies with market caps above $100 million posted impressive gains:

The global cryptocurrency market capitalization stood at $2.94 trillion, down 0.85% over the previous 24 hours.

Stocks Got the Santa Rally Instead

While crypto markets languished, traditional equity markets showed more holiday spirit. Stock futures ticked higher Thursday evening, with the Dow Jones Industrial Average Futures rising 15 points, or 0.03%, as of 8:20 p.m. EDT. Futures tied to the S&P 500 gained 0.07%, while Nasdaq 100 Futures added 0.11%.

The gains followed a genuine Santa rally on Christmas Eve, when the S&P 500 closed at a new record high on Wednesday. Both the Dow Jones Industrial Average and the tech-focused Nasdaq Composite also closed higher.

The New York Stock Exchange and Nasdaq Exchange were closed Thursday for Christmas and resumed regular trading on Friday.

Key Price Levels to Watch

So what's next for Bitcoin? Analysts are watching specific technical levels that could determine the trajectory for the weeks ahead.

Michaël van de Poppe, a widely followed cryptocurrency commentator, expects Bitcoin to revisit $90,000 or higher during the weekend or next week. "I think commodities are overdue and liquidity will move elsewhere + loosening conditions on the [macroeconomic] side of this world," he added, suggesting broader market factors could help crypto catch up.

Ted Pillows, an angel investor and cryptocurrency market observer, laid out the critical price zones. According to Pillows, a Bitcoin daily close above $89,500 would likely drive the asset toward the $100,000 level that has tantalized traders for weeks.

The flip side? A daily close below $85,000 risks pulling Bitcoin below $80,000, Pillows projected. That's a fairly tight range, and it means the next few days of trading could prove decisive for Bitcoin's near-term direction.

With thin holiday liquidity giving way to normal trading volumes, we'll soon see whether crypto markets can shake off the "Extreme Fear" and join the party, or if that Santa rally remains exclusive to traditional markets.