Chinese Crypto Twitter Reads Santa Rally as a Litmus Test for 2026

The Santa Rally—Wall Street’s beloved year-end custom—has discovered an keen viewers amongst Chinese crypto Twitter’s most adopted analysts.

Far from dismissing it as Western-market folklore, key opinion leaders within the Chinese-speaking group are treating the ultimate buying and selling days of 2025 as a crucial sign of what lies forward in 2026.

Santa Rally More Than Seasonal Noise

Phyrex, some of the cited macro analysts in Chinese crypto circles, argues that the Santa Rally isn’t merely a statistical curiosity. “It’s extra like a barometer of market danger urge for food,” he wrote. “If markets handle to rise as anticipated from Christmas via New Year—with out contemporary macro catalysts—it confirms that buyers are nonetheless prepared to allocate to danger belongings, setting the emotional basis for subsequent yr’s pricing.”

The flip aspect carries weight, too. A failed rally, Phyrex warns, usually alerts that danger urge for food has not recovered, leaving markets susceptible to weak spot or uneven buying and selling nicely into January and past.

The analyst factors to a number of mechanical elements that sometimes help year-end features. Tax-loss harvesting wraps up by mid-December, releasing capital to rotate again into equities. Institutional desks go quiet for the vacations, scaling down volumes and permitting modest shopping for stress to maneuver indices greater. Year-end bonuses and computerized 401(okay) contributions add passive bid help.

Michael Chao, a US-focused markets commentator fashionable on Chinese Twitter, highlighted the historic odds: since 1950, the S&P 500 has risen 75% of the time through the Santa Rally window, posting a median acquire of 1.55%.

But Risks Loom Large

Not everyone seems to be popping champagne early. Cryptojiejie noted that Bitcoin and Ethereum international volumes have shrunk to 2025 lows, calling present circumstances “rubbish time” for merchants. She suggested breakout-focused merchants to step again and benefit from the holidays till liquidity returns.

Macro headwinds add to the warning. Zhou Financial wrote that the Bank of Japan’s December price hike to 0.75% has raised considerations about the unwinding of the yen carry trade, whereas the Federal Reserve’s hawkish 25-basis-point price reduce—paired with a dot plot signaling solely two cuts via 2026—dissatisfied markets that had anticipated extra lodging.

Phyrex framed the strain bluntly: “If the market nonetheless can’t kind an efficient rally beneath seasonal tailwinds and steadily recovering liquidity, it possible means the present high-rate atmosphere’s stress on the financial system has already overwhelmed the sentiment increase from vacation elements.”

The 2026 Preview

For Phyrex, this yr’s Santa Rally carries outsized significance. He sees it as successfully a preview of Q1 2026 expectations. The logic is simple: if buyers refuse to bid up danger belongings even when seasonal patterns, sentiment vacuums, and returning liquidity all align of their favor, one thing deeper could also be damaged.

The intense give attention to Wall Street could partly mirror a lack of home choices. Earlier this month, seven major Chinese financial industry associations issued a joint danger warning—probably the most complete crypto crackdown because the 2021 ban that drove all exchanges overseas.

The assertion explicitly prohibited real-world asset (RWA) tokenization for the primary time, alongside stablecoins, airdrops, and mining. With regulators sealing off just about each on-ramp, Chinese crypto buyers have little selection however to observe international markets from the sidelines.

As Chinese crypto Twitter watches Wall Street simply as intently as anybody else, all eyes are on whether or not Santa reveals up.

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