Many are hoping to see a so-called "Santa Claus rally" in the cryptocurrency world to end a fiscal year. So far, the 24-hour movements of Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and CRYPTO: DOGE suggest that this late-year rally may take more time to materialize, and may not materialize at all. As of 2:30 p.m. Et, these ** cryptocurrencies are down 3.6%, 4.6% and 5.7%, respectively, in the last 24 hours.

Trading volume in stocks and other assets is very thin during the holidays, and a similar phenomenon exists in the cryptocurrency space. That being said, the selling pressure is still evident today and has once again pushed Bitcoin below the key $100,000 mark, with Ethereum continuing to hover around $3,300 and Dogecoin trading around $0.31.

Let's take a deeper look at the factors behind the price movements of these digital assets today.

No Santa Claus?
With very low trading volumes, people may not want to see too much volatility. That is the case for stocks today.

However, there have been some interesting comments that now rising interest rates may begin to weaken risk assets (including cryptocurrencies), which has caused some investors to rethink their core investment thesis on this asset class. For Bitcoin holders, the question is whether the asset is a store of value (such as digital gold) or a risky asset. I think the jury is still out, some investors clearly see rising interest rates as a disincentive for capital flows into more speculative or risky assets, and capital flows into more safe-haven assets towards the end of the year.

From a speculative and trading perspective, long derivative contracts also appear to have seen strong liquidation activity, indicating that leveraged bets on the three tokens rising in a short period of time are being unwound. In the cryptocurrency ecosystem, the impact of being so highly leveraged can be large on the way up, but such volatility can be a double-edged sword, and prices can fall sharply even on days with relatively low trading volumes.

With the dollar remaining strong and capital continuing to flow from most asset classes (including gold) to money market funds in recent weeks, it's entirely possible that Santa intends to deliver a lump of coal to all cryptocurrency investors next week. We'll wait and see.

What will 2025 bring?
One thing I've learned is that it's impossible to predict exactly what a particular asset class will do in the short term. For most assets, however, the long-term trend tends to be upward. Although cryptocurrencies as an industry have only been around for about 15 years, one only has to look at the long-term charts of tokens like Bitcoin to understand that compounding can last a long time.