Have you planned your holiday shopping yet? As Thanksgiving, Black Friday, and Cyber Monday approach, retailers brace for a five-day spending frenzy. While this period boosts retail profits, its impact on risk assets like cryptocurrencies remains nuanced. Could Bitcoin reach $100K this year? Let's explore the key insights.
Retail, Stocks, and Cryptocurrency: A Comparative Analysis
Thanksgiving—the fourth Thursday in November—kicks off a five-day shopping spree in the U.S. Retailers generate a significant portion of their annual revenue during this period, especially on Black Friday and Cyber Monday.
- Black Friday traditionally marks the shift from "red" to "black" in retailers' balance sheets.
- Cyber Monday sees consumers returning to work and shopping online.
These sales figures help gauge consumer sentiment and retail sector health. Strong spending often signals a profitable holiday season, potentially lifting retail stocks. Conversely, recession fears may dampen spending and stock prices.
However, retail performance isn't the sole market driver. Earnings reports and global events also influence year-end market trends.
Unlike stocks, cryptocurrencies aren't tied to corporate earnings. Their value derives from market dynamics, making their Thanksgiving performance distinct.
👉 Discover how Bitcoin trends compare to traditional markets
Stock Market Dynamics During Thanksgiving Week
The U.S. stock market closes on Thanksgiving and operates shortened hours on Black Friday. Trading volumes typically drop as consumers shift focus to shopping.
Key Trends:
- Holiday Effect: Stocks often see slight gains before holidays due to reduced trading activity.
- Volume Decline: Trading volumes drop by ~20% before Thanksgiving and up to 55% on Black Friday.
- Cyber Monday: Volumes rebound but with marginal average returns (~0.06% decline).
S&P 500 Performance Highlights:
- 2018–2022: Average return of +0.6% in the three days before Thanksgiving.
- Long-Term: Mixed results, with gains occurring only 50% of the time. Notable swings include +1% in 2001, 2007, and 2012, and a -1.7% loss in 2009.
Cryptocurrency Performance During Thanksgiving
Historically, Thanksgiving has had minimal impact on crypto markets. While trading volumes may dip, the effect is usually short-lived.
Bitcoin in 2022: A Challenging Thanksgiving
Amid the FTX collapse and broader market turmoil, Bitcoin struggled:
- November 2022: Average price of ~$17,600, down 16.2% monthly.
- Pre-Thanksgiving Low: $15,782.30.
- Thanksgiving Day: Slight recovery to $16,771.48.
- YTD Performance: -65%.
Bitcoin in 2023: A Strong Rebound
Optimism around Bitcoin ETFs fueled gains:
- November 2023: Price rose from $34,600 to $37,750 (+8.81%).
- Thanksgiving Day: Surged to $38,189.66.
- YTD Performance: +123.3% from 2022 lows.
Bitcoin in 2024: Consolidation After Record Highs
Following a November ATH of $93,477.11, Bitcoin is consolidating:
- Current Support Levels: $75K–$76K.
- Potential Catalyst: A retest of $86K could reinforce bullish momentum.
- Market Sentiment: Fed rate cut probability has cooled to 61.9%.
👉 Stay updated on Bitcoin's latest trends
Black Friday Crypto Deals: What to Watch For
Exchanges often roll out holiday promotions, but caution is advised:
Pros:
- Sign-up bonuses and reduced fees can lower entry barriers.
- Limited-time offers may boost short-term returns.
Cons:
- FOMO-Driven Decisions: Impulsive trading can undermine long-term strategies.
- Scams: Some "too-good-to-be-true" deals are fraudulent.
Pro Tip: Avoid emotional trading by recognizing biases like FOMO (Fear of Missing Out). Research shows this bias disproportionately affects investors aged 18–35.
FAQs
1. Does Thanksgiving historically boost crypto prices?
No. Cryptocurrencies typically show little correlation with Thanksgiving trends.
2. How does Black Friday affect Bitcoin trading volumes?
Volumes may dip slightly as traders focus on retail sales, but the impact is usually minor.
3. Are Black Friday crypto deals worth it?
Some offers are legitimate, but always read the fine print to avoid scams.
4. What’s Bitcoin’s outlook for Thanksgiving 2024?
While consolidating near ATHs, bullish sentiment remains if key support levels hold.
5. How do stocks perform during Thanksgiving week?
The S&P 500 averages modest gains (~0.6%) in the days before Thanksgiving.
Final Thoughts
Thanksgiving week has a muted effect on crypto markets compared to retail and stocks. In 2024, Bitcoin's performance will likely hinge on macroeconomic factors rather than holiday trends. Traders should prioritize fundamentals over fleeting Black Friday promotions.