Santa Rally—Wall Street's year-end classic—is receiving great interest among the most followed analysts on Chinese crypto Twitter.
They do not see this merely as a stock market myth exclusive to the West. Leading figures in the Chinese crypto community interpret the last trading days of 2025 as a critical signal for what is to come in 2026.
Santa Rally: More Than Just a Seasonal Noise
Phyrex, one of the most cited macro analysis experts in Chinese crypto circles, argues that the Santa Rally is not just a statistical coincidence. Phyrex stated, 'This is actually a barometer of market risk appetite.' He added, 'If markets rise from Christmas to New Year's without a new macro catalyst, it indicates that investors are still willing to seek out risky assets. This creates an emotional groundwork for the coming year.'
It also draws attention to the other side of the coin. According to Phyrex, a failed rally often means that risk appetite has not returned, which can lead to the market remaining weak or volatile throughout January and beyond.
The analyst points out several technical factors that typically support year-end rallies: Capital is freed up for a return to stocks with the realization of tax losses by mid-December. Institutional desks quiet down during the holiday season, volume drops, and this allows indices to rise with light buying pressure. Year-end bonuses and automatic 401(k) contributions provide passive buying support.
Michael Chao, a commentator on the U.S. markets closely followed by Chinese investors, highlights historical statistics: Since 1950, the S&P 500 has risen in 75% of the Santa Rally periods and has achieved an average return of 1.55%.
However, Big Risks are Ahead
Not everyone is raising a glass yet. Cryptojiejie stated that Bitcoin and Ethereum global volumes have fallen to their lowest levels in 2025, and that the current time is 'garbage time' for traders. They advised breakout-focused traders to wait for liquidity to return and take a break until the New Year.
Macroeconomic winds, however, are increasing caution. Zhou Financial noted that the Bank of Japan's interest rate hike to 0.75% in December raised concerns about the end of the yen carry trade. In addition to the 25 basis point interest rate cut by the Federal Reserve (Fed) with a hawkish stance, the fact that only two interest rate cuts are anticipated in the dot plot disappointed the markets. More easing was expected, but it did not materialize.
Phyrex clearly laid out the table: 'If the market cannot form an effective rally despite seasonal winds and gradually recovering liquidity, it means that the impact of this high-interest environment on the economy is suppressing the morale boost from holiday factors,' he said.
A Look at 2026
The importance of this year's Santa Rally for Phyrex is significant. According to him, this period is almost a rehearsal for expectations for the first quarter of 2026. The logic is simple: If investors are avoiding buying risky assets, even though seasonal effects, morale gaps, and returning liquidity strengthen their hands, there is a deeper problem at play.
This intense focus on Wall Street may also be influenced by the decrease in domestic options. Earlier this month, seven major institutions from China's financial sector issued a joint risk warning. This warning has been recorded as the most comprehensive crypto crackdown since all cryptocurrency exchanges were forced to exit the country in 2021.
The statement explicitly banned the tokenization of real-world assets (RWA) for the first time, as well as stablecoins, airdrops, and mining. While regulators closed almost all entries, Chinese crypto investors had to watch global markets from a distance.
Chinese crypto Twitter continues to watch Wall Street closely, just like everyone else. Let's see if Santa will visit this year.
