Bitcoin BTC$89,791.79 has experienced its toughest fourth quarter since 2022, but a time-honored Wall Street pattern could soon bring relief to battered BTC bulls.

That pattern is S&P 500's tendency to chalk out a Santa rally – an upswing during the final five trading days of December and the first two of January. A repeat of this pattern could improve sentiment in the bitcoin market.

Bullish Santa seasonality

Since 2005, the S&P 500 has gained during the Santa Claus rally period 15 times and lost only five times, averaging 0.58% returns, according to data source The Market Stats. Going back to the 1950s, it has risen 77% of the time and never declined three years in a row during this window. The index dipped in the last two Santa periods.

Taken together, these data sets mean that the S&P 500 is likely to chalk out a rally into the new year.

For BTC, this bullish S&P 500 seasonality increasingly matters as the increasing institutional adoption via ETFs has tightened the link between digital assets and equities. So, a festive bid in stocks could spill over into bitcoin and the wider crypto market.

BTC's Santa Claus rally history is checkered since launch, with strong return to the tune of 33% and 46% in 2011 and 2016, respectively. Other years have been weaker, with declines of 14% in 2014 and 10% in 2021. Still, it averages 7.9% since 2011, with the market being quite small and dominated by OGs in early years.

Gold, the star performer

According to TheMarketStats, gold has been the top performer, delivering a 95% cumulative return over this period. Looking back to 2005, only 2023 recorded a slight negative return.

This strength has coincided with gold pushing to new all time highs above $4,400 an ounce at press time, hinting at yet another positive Santa period.

Broadly speaking, while gold is trading at all-time highs, the S&P 500 is just 1.5% away from its own record levels. Meanwhile, bitcoin remains roughly 30% below its peak.