Bitcoin and ether ended December with little sign of the year end burst traders often bank on, capping a quarter that shows just how fragile crypto rallies can look when liquidity thins and risk appetite slips.

The so-called ‘Santa rally’ never really arrived. Instead, repeated attempts by bitcoin to reclaim key levels were sold into, while ether and large cap tokens followed lower.

Bitcoin is on track to end December down about 22%, its worst month since December 2018, while ether is on track to end Q4 2025 down 28.07%, according to data curated by CoinGlass.

A 'Santa rally' is the tendency for markets to rise in the final week of December and early January, driven by thin liquidity, year-end portfolio rebalancing, and upbeat holiday sentiment.

That weak finish matters because crypto has historically relied on strong late-year flows to set up early-cycle momentum. This time, December looked more like a positioning reset than the start of a new leg higher.

With bitcoin’s fourth-quarter performance turning sharply negative, the quarterly tape now reads as risk off rather than risk on.

The contrast with precious metals has been hard to miss.

Gold has pushed to fresh records on rate cut expectations and geopolitical stress, while silver has surged and platinum has also hit new highs, as previously reported by CoinDesk.

Gold has benefited from steady central bank demand and rising ETF allocations, reinforcing its role as a reserve-style hedge when investors are uneasy.

Bitcoin, by comparison, has traded more like a high beta asset. Even when the macro backdrop points toward easier policy, bitcoin has struggled to hold gains without a broader bid for risk.

The pattern has become familiar in late 2025, where bounces have been met by fast profit taking, leverage has been reduced during the holidays, and U.S. hours have tended to see the heaviest selling as funds clean up positions.

Volatile yields and a choppy dollar have kept investors in capital preservation mode, a setup that tends to favor gold first and speculative assets later.

The first test will be whether bitcoin can hold its recent support zones into the new year. If it cannot, the failed Santa rally may be remembered as an early warning that the market still needs a deeper reset before the next sustained run.