The Christmas rally has arrived: US stocks have risen for eight consecutive days, setting a 5-year record. How will the crypto market respond?

The “Santa Claus Rally” has arrived again at the end of the year. On December 23, major US stock indices generally rose, with gold and silver reaching all-time highs, and even platinum approaching record levels. However, the performance of the crypto assets market was different—it surged before retreating.

The S&P 500 had the best performance this Monday. In just one week, it erased all the losses from December, and if this momentum continues, it is expected to achieve an eight-week winning streak, the longest since 2018. What is driving this behind the scenes?

First, let’s talk about the technical drivers. Last Friday's “Triple Witching Day” options expiration was classic — the large number of bullish positions accumulated in the S&P 500 within the 6700-6800 range were cleared out at that moment, releasing considerable space for stock price increases. Even more interesting is that the VIX volatility index dropped below 15, hitting a low not seen since August. The short-term implied volatility continues to compress, and market makers' hedging demand starts to follow suit, leading the market into a “slow climb” rhythm.

Seasonal factors cannot be ignored either. Historical data has long figured this out – the end of the year is usually the strongest period for the stock market. This is not a coincidence.

Looking deeper, investors have started to position themselves with optimistic expectations for 2026. Accelerating GDP growth, rising corporate profits, and the transformational potential brought by AI trading have all been incorporated into trading logic. Recently, Federal Reserve Governor Milan also made dovish remarks—indicating that if interest rates are not cut further next year, there is a risk of recession. Such statements have an immediate stimulating effect on risk appetite.

From a chart perspective, everyone is watching the 7000 points of the S&P 500. That is the next psychological barrier and also the focus going forward.

The performance of the encryption market in this round of global asset rotation has been somewhat mild. The strength of mainstream assets has diverted some funds to a certain extent, but from a macro perspective, the improving liquidity and the upward trend in risk appetite still support digital assets. Short-term fluctuations do not change the mid-term logic.