🎆 What is the 'New Year rebound' in crypto?
It is the idea that prices tend to bounce back at the end of December or in the first days of January, after:
Previous declines
Sales for year-end closure
Profit-taking
Tax and accounting adjustments
In crypto, this phenomenon is often called:
New Year Rebound
January effect
Post year-end relief rally
📉 Why does the market often fall beforehand?
Before New Year, it is common to see downward pressure due to:
🔹 1. Year-end profit-taking
Funds and traders close winning positions
Especially after strong rallies in BTC, ETH, or altcoins
🔹 2. Tax optimization
In some countries, assets are sold to:
Realize losses
Offset gains
This adds temporary selling pressure
🔹 3. Low liquidity
Less institutional volume
More abrupt movements
More volatility with less capital
All this artificially depresses prices, not necessarily structurally.
📈 Why are some traders expecting a rebound?
🟢 1. Re-entry of capital in January
New budgets
New investment mandates
Funds are reallocating risk
🟢 2. Technical reversal
Many assets reach:
RSI oversold
Key supports
Negative funding rates
Excess of shorts
This creates conditions for short squeezes or technical rebounds.
🟢 3. Psychological narrative
“New year, new cycle”
Change of sentiment
Increase in retail activity after holidays
In crypto, the narrative matters a lot.
🐳 What role do whales play?
In previous cycles, it has been observed that:
Whales and large entities accumulate in weakness
They take advantage of forced sales and low liquidity
They do not buy the top, they buy the fear
This does not guarantee increases, but reduces the risk of disorderly declines if the macroeconomic situation does not worsen.
⚠️ Important risks to consider
The “New Year's rebound” does not always happen. It can fail if:
🔴 There are macro shocks (Fed, inflation, employment)
🔴 Bond yields or the dollar rise
🔴 There are negative regulatory events
🔴 Or simply the market needs more time for consolidation
👉 Many rebounds are technical rebounds, not the start of a bull run.
🧠 How traders are playing it (in general)
The typical approach is:
Waitconfirmation, do not anticipate
Observe:
Increasing volume
Break of resistances
Improvement in funding and open interest
Differentiate between:
Technical rebound
Trend change
This is general information and does not constitute financial advice. For personal guidance, consult a licensed professional.