Learning the friendly way

Ever heard of the "Santa Claus Rally"? Coined by Yale Hirsch and borrowed from traditional market terminology, this phenomenon describes a year-end increase in asset prices, more specifically the last 5 trading days of December and first 2 of January. In the crypto market, there have been 5 Santa Claus Rallies in the last 10 years, while 8 rallies were recorded in the pre-Christmas period from 19 - 25 December. During these rallies, total crypto market capitalisation has seen gains ranging from 0.2% to an impressive 11%.

Let’s explore the validity of this concept, and how it pertains to the crypto markets. 

Pre-Christmas vs. post-Christmas trends

The term "Santa Claus Rally" might sound like wishful thinking, but the numbers tell a more nuanced story. Over the past ten years, the crypto market has demonstrated an interesting pattern of performance during the holiday season, with market capitalisations showing unexpected movements that defy simple predictions.

Interestingly, pre-Christmas Bitcoin rallies (19 to 25 December) were the most frequent, with gains ranging from a modest 0.2% to 13%. 

However, when the BTC market turned bearish, pullbacks were typically more severe after Christmas than before. The largest dip, a wild 21%, occurred in 2017 following the ICO boom. Pre-Christmas declines, meanwhile, were more moderate, with decreases of 6% in 2017 and 1% in 2019.

Years with double rallies

Bitcoin, typically illustrating broader market trends, has delivered equally compelling year-end performances. Over the past decade, it recorded pre-Christmas rallies 8 times, with its standout surge occurring in 2016, with a 13% increase in the week leading up to Christmas and 10% gains post-Christmas.

On the flip side, 2017 marked a dramatic downturn, with Bitcoin's price plunging 21%, highlighting the market's inherent volatility.

Interestingly, only three years (2016, 2020, and 2023) witnessed consistent crypto market gains both before and after Christmas as well as overall in the month of December. Similarly, in 2023, while slight, the crypto market rebounded from bearish territory with gains of 1% before Christmas and 4% after, making a total of 12% gains over the entire month. 

The broader December effect

Zooming out, the month of December paints a more dynamic picture. Half of the past decade saw December-wide market increases ranging from 12% (2023) to a dramatic 47% (2020). 

On the flip side, during bearish Decembers, losses ranged between 4% and 17%.

Bitcoin and the Santa Claus effect

Looking over the numbers, from 2014 to 2023, Bitcoin has seen 5 Santa Claus rallies, peaking at 11% in 2020. However, Bitcoin also faced notable declines, including a dramatic 21% drop in 2017 during the post-Christmas period.

On average, speculating on Bitcoin during Santa Claus rally periods would have yielded modest returns of about 1.3% pre- and post-Christmas. In comparison, holding Bitcoin throughout December delivered a much higher average return of 9.5%, illustrating the variability and inconsistency of the Santa Claus effect.

Takeaway: a mixed bag of opportunities

The Santa Claus Rally remains an inconsistent occurrence in the crypto space. While historical data provides intriguing patterns, traders should approach this trend with cautious optimism, as past performance is no guarantee of future results.

‍

‍

Before Bitcoin was launched in 2009, Satoshi Nakamoto designed the cryptocurrency to have a maximum supply of 21 million coins. As part of the greater plan, the number of new Bitcoin that enter circulation decreases at regular intervals, thus maintaining the total supply. These intervals are known as halvings, and affect everything from market value to investing strategies to potential profitability. Let's get into it.

What is the Bitcoin halving?

Roughly every 4 years, or every 210,000 blocks that are mined, the network undergoes a halving where the block reward for miners is reduced by 50%. This reward is earned by verifying transactions and adding a new block to the blockchain. 

The halvings process decreases the rate at which new Bitcoins enter circulation, gradually depleting the remaining supply until the final satoshi is mined, expected to be around 2140. After that, miners will solely rely on transaction fees as an incentive to validate blocks.

The most recent Bitcoin network halving took place in April 2024, when the mining reward was reduced from 6.25 BTC to 3.125 BTC.

Why does the halving occur?

The Bitcoin halving is pre-programmed into Bitcoin's core code and is not something that can be changed - it's set in stone. Designed to control and slow down the release of new Bitcoins over time results in fewer and fewer Bitcoin being minted after each halving event. 

This limited supply is a key part of what gives the digital currency its deflationary nature and potential for increasing value. As the supply is capped at 21 million, the dwindling new supply hitting the market reinforces Bitcoin's artificial scarcity.

Previous Bitcoin halvings

Below we look at previous halvings and how these affected the price of Bitcoin. Historically, 12 - 18 months after halvings, Bitcoin has reached a record high. While this is not the rule of thumb, it has certainly been witnessed. 

2009 - Bitcoin launches

Date: 3 January 2009

Block reward: 50 BTC

2012 - Bitcoin’s first halving

Date: 28 November 2012

Block: 210,000

Block reward: 25 BTC

Price before halving (November 2012): Around $12

Next all-time high after halving: $1,156 (November 2013)

2016 - Bitcoin’s second halving

Date: 9 July 2016

Block: 420,000

Block reward: 12.5 BTC

Price before halving (July 2016): Around $650

Next all-time high after halving: $19,891 (December 2017)

2020 - Bitcoin’s third halving

Date: 11 May 2020

Block: 630,000

Block reward: 6.25 BTC

Price before halving (May 2020): Around $8,800

Next all-time high after halving: $69,000 (November 2021)

2024 - Bitcoin’s fourth halving

Date: 19 April 2024

Block: 840,000

Block reward: 3.125 BTC

Price before halving (April 2024): Around $65,000

At the time of writing, next all-time high after halving: $99,655.50 (November 2024) 

Taking a look at the future dates, the next halving is expected to take place in 2028, when the block reward will be reduced to 1.5625 BTC. Thereafter, in 2032 and 2036. This will continue until all Bitcoins have been mined, which is expected to be in 2140. 

Potential impacts of the recent halving

The next Bitcoin halving event is expected to have several potential impacts on the cryptocurrency. First and foremost, it will reduce the supply of new Bitcoins entering circulation by 50%, substantially decreasing its inflation rate. This scheduled supply rate reduction enhances Bitcoin's hardcoded scarcity which could lead to increased demand if investors view reduced supply as more desirable. Higher demand coupled with tightened supply could potentially drive up Bitcoin's price.

However, the halving will also cut block rewards for miners by 50%, which could force some smaller mining operations to shut down if their expenses outweigh newly reduced revenues. This may result in mining becoming less decentralised as larger entities with greater economies of scale are able to continue operating profitably. This could lead to further consolidation of the mining hashrate among a smaller number of big players.

Regardless of price movement, the most recent halving holds significance for Bitcoin's disinflationary issuance schedule, which will continue until the final Bitcoin is mined around 2140. This systematically shrinking supply reinforces Bitcoin's key value proposition as a deflationary asset, with absolute scarcity built into its design. Understanding this info highlights why some investors see Bitcoin's scarcity as a central role in its potential long-term value.

How will the rest of the crypto market be impacted?

We can confirm that Bitcoin's halving creates a ripple effect across the entire cryptocurrency market. While it directly impacts Bitcoin, it can also cause broader market shifts affecting many altcoins as investors start adjusting their portfolios during this time, which can lead to increased volatility and capital moving between digital assets. 

Established cryptocurrencies like Ethereum often respond to Bitcoin's market changes, though their reactions aren’t always predictable. Smaller, less-known coins may face even greater uncertainty. Because crypto markets are so interconnected, even indirect effects from the halving can create big waves, making it a key event that influences the entire ecosystem.

Should I invest during a Bitcoin halving?

Sure, navigating Bitcoin halving speculation can feel like walking through a maze. Investors often debate the best timing - before, during, or after the event - but there's really no universal playbook. 

The cryptocurrency market moves in mysterious ways, influenced by countless global factors, and past halvings have shown dramatically different market behaviors, making predictions challenging. While some see these events as potential opportunities, others view them with caution. 

The key is understanding that no single strategy guarantees success. Individual research, a clear view of personal risk tolerance, and a broad understanding of market dynamics are essential for anyone considering involvement in this volatile landscape.

The bottom line

The Bitcoin halving is a highly significant event worth learning about as it enforces the cryptocurrency's hardcoded disinflationary monetary policy. While past halvings have led to powerful bull markets and substantial price appreciation, as illustrated above, it's important to understand that future price movements remain unpredictable and cannot be relied on. 

Bitcoin's value is influenced by a complex array of factors beyond just supply dynamics, including adoption rates, regulatory developments, and overall market sentiment. Though artificially constrained supply can increase scarcity, demand is ultimately the driving force behind long-term valuations. 

‍

‍

Let's be honest, entering the world of crypto can feel like trying to surf a tsunami while blindfolded. Especially during a bull market, when excitement is running high and everyone seems to be making money, it's easy to get swept up in the madness. We’ve all be there. But here's the deal: smart surfing is about strategy, not just catching the biggest wave.

What you need to know about bull markets

A bull market is crypto's version of spring - everything's blooming, prices are rising, and optimism is in the air. But just like spring can bring unexpected storms, the crypto market has its own unpredictable weather.

Do your homework (just do it)

Forget following random influencers promising overnight riches. The crypto world moves fast, and information is your best life jacket. Here's what to focus on:

• Research is your superpower: Dive deep into projects. What problem are they solving? Who's behind the team? What makes them unique?
• Understand the narratives: The crypto market loves stories. Right now, everyone's talking about AI tokens, decentralised infrastructure, and meme coins. Know what's trending, but don't just jump in blindly.

Build your crypto survival kit

Think of your crypto journey like preparing for an adventure:

1. Diversification is your friendsome text
   • Don't put all your eggs in one digital basket
   • Mix different types of cryptocurrencies
   • Consider a blend of established coins and promising new projects
2. Emotional discipline is your mentorsome text
   • FOMO (Fear Of Missing Out) is the crypto trader's worst enemy
   • Set clear goals and stick to them
   • Have a plan for both buying and selling

Spot the red flags and warning signs

Spotting the red flags

• Promises of guaranteed returns? 🚩 Red flag
• Projects with zero transparency? 🚩 Run away
• Everyone's talking about a coin, and you feel pressured? Take a breath

Risk management implementation

• Only invest what you can afford to lose
• Consider using strategies like Dollar Cost Averaging (buying small amounts regularly)
• Set up stop-loss mechanisms to protect your investment

The learning never stops

There’s nothing wrong with a long-term hodl plan. But if you’re looking to shake things up: stay curious, stay learning:

• Follow reputable crypto news sources
• Join community discussions
• Watch educational content from experienced traders

Always look beyond the hype

Look beyond price. Understanding blockchain technology, market trends, and the real-world applications of cryptocurrencies will make you a smarter investor.

Mindset matters

Remember, this isn't a get-rich-quick scheme. It's a journey of learning, strategy, and calculated risks. Some days you'll feel like a crypto wizard, other days like you're playing financial Jenga.

Pro tips from the crypto trenches

• Keep emotions in check
• Don't chase every shiny new token
• Learn from both your wins and losses
• Stay humble and curious

The bottom line

Crypto trading during a bull market is thrilling, but it's not a lottery. It's about informed decisions, continuous learning, and maintaining a level head.

Disclaimer: This guide is for educational purposes only. The crypto market is volatile, and past performance doesn't guarantee future results. Always do your own research and consider consulting with a qualified financial advisor before making investment decisions.

Stay smart, stay safe, and enjoy the ride! 

‍

Ever wondered how cryptocurrency prices are worked out on exchanges? The answer lies in a powerful tool called an order book. Think of it as a real-time snapshot of what is happening in the crypto market, showing exactly who wants to buy and sell at what prices. 

In this article, we explain everything you need to know about crypto order books and how they fit into your crypto journey. 

Understanding the basics: what is a crypto order book?

A crypto order book is like a dynamic ledger that displays all pending buy and sell orders for a specific cryptocurrency on an exchange. Imagine it as a marketplace where buyers and sellers gather, each stating their desired prices. The order book continuously updates in real-time, keeping a live record of the ever-changing supply and demand dynamics.

How does a crypto order book work?

The order book is divided into two main sections:

1. Bid Orders (Buy Side)some text
   • Shows prices traders are willing to pay
   • Typically displayed in green
   • Higher bids appear at the top
2. Ask Orders (Sell Side)some text
   • Shows prices traders want to sell at
   • Usually displayed in red
   • Lower asks appear at the bottom

The difference between the highest bid and lowest ask is called the "bid-ask spread". This number is a prime indicator of market liquidity and trading costs.

Different order types

The order book handles several types of orders:

• Market orders: Execute immediately at the best available price
• Limit orders: Set a specific price for execution
• Stop loss: Automatically sell when the price hits a certain level
• Take profit: Lock in gains at predetermined prices

Market depth

The order book also indicates market depth, showing the volume of orders at different price levels. Deep markets with large order volumes typically mean:

• More stable prices
• Easier trading
• Better price execution

How to use an order book 

1. Watch the spreadsome text
   • Tighter spreads indicate better liquidity
   • Wider spreads might mean higher trading costs
2. Monitor depthsome text
   • Look for significant support and resistance levels
   • Be cautious of thin order books
3. Consider volumesome text
   • Higher volumes suggest more active trading
   • Lower volumes might indicate increased risk

Why order books matter for crypto trading

Order books have become an integral part of crypto trading because they provide a clear view of real-time supply and demand. This helps traders understand market sentiment, track price changes, and spot potential trends. With this transparency, it’s easier to gauge how the market is moving at any given time.

They also offer a valuable tool for building trading strategies. They help traders find support and resistance levels, identify large orders that might affect prices, and decide when to enter or exit trades. 

Common order book patterns to watch out for

1. Wall: Large orders at a specific price level that might prevent price movement
2. Depth Imbalance: More orders on one side, suggesting potential price direction
3. Tight Spread: Indicates high liquidity and active trading
4. Wide Spread: Suggests low liquidity and potential volatility

Alternatives to order book trading

While order books dominate centralized exchanges, other trading mechanisms also exist:

1. Automated Market Makers (AMMs)some text
   • Used by decentralized exchanges
   • Rely on mathematical formulas instead of order matching
   • Popular in DeFi applications
2. Over-the-Counter (OTC)some text
   • Direct trading between parties
   • Typically used for large volumes
   • More private than exchange trading

Final thoughts

Understanding crypto order books is crucial for anyone serious about trading digital assets. They provide valuable insights into market dynamics and help traders make informed decisions. Whether you're a beginner or an experienced trader, mastering order book analysis can significantly improve your trading strategy.

Remember: Order books are just one tool in your trading arsenal. Experienced traders tend to combine order book analysis with other technical and fundamental analysis methods for a more comprehensive trading approach.

‍

‍

Navigating the crypto world can be tricky, especially with new coins popping up daily. How do you tell which ones are legit and which are scams?

This guide will walk you through five simple ways to check if a cryptocurrency project is trustworthy. We'll show you how to spot red flags and avoid falling for schemes that could end up only costing you money.

By the end, you'll have practical tools to assess whether a token is likely to last or disappear quickly. This knowledge will help you make smarter choices and protect your investments.

Let's get started on how to separate the Bitcoins from the deadcoins in the world of crypto.

1. Start with social media and good old Google

Start your crypto research with basic Google and social media searches. Look for the token's official website, whitepaper, and verified social media accounts. Be wary of projects with many followers but little genuine engagement - comments like "Great project!" or "To the moon!" from multiple accounts could be red flags.

When searching for the token address, you should easily find links to block explorers, the official website, and whitepaper. If these aren't readily available, it's cause for concern. Also, be cautious of Google Ads, as scammers often use them. And always double-check you're on the official site to avoid potential scams or malware.

Remember, a legitimate project will have a clear online presence and purpose. If you can't find basic information about a token, it's likely not worth your investment. Trust your instincts - if something seems off, it probably is.

2. Utilise block explorers’ comments section

Another simple yet effective way to vet a crypto project is to check the comments section on block explorers like Etherscan. While many tokens have no comments, scam projects often attract a flurry of negative feedback.

To do this, visit the token's page on Etherscan (or another relevant block explorer) and look for the comments tab. If you see users calling out the project as a scam, take it very seriously - these warnings are usually accurate. Remember, people who've lost money are likely to warn others, so these comments can be valuable red flags.

If you've personally fallen victim to a scam, consider leaving a comment to alert others. This simple step of checking (and potentially contributing to) the comments section can be a quick way to gauge a project's legitimacy and protect yourself and others from potential fraud.

3. Look for its listing on a token explorer site

Checking token explorers like CoinGecko or DappRadar's Token Ranking can quickly reveal potential scams. If a token isn't listed on these platforms, it's often a red flag.

Even for listed tokens, watch out for warning notifications like the one below. These are valuable alerts designed to help you spot risks.

Keep in mind that while legitimate projects usually share information with these ranking services, not all tokens appear automatically. Some platforms have specific listing criteria.

‍

4. Check the token’s liquidity on DEXs

When determining whether a coin is a scam, assessing its liquidity is always a good call. Liquidity on DEXs refers to the amount of cryptocurrency or tokens locked in smart contracts, enabling trading on decentralised exchanges like Uniswap V2.

Checking liquidity is simple and can provide valuable insights into a token's legitimacy. If the liquidity is below $100,000 or rapidly decreasing, it's often a red flag indicating a potential scam.

Tools like DappRadar can be helpful in this process. For tokens tracked on their supported blockchains, DappRadar provides warnings when liquidity levels are concerningly low.

Remember, adequate liquidity is essential for a healthy token ecosystem. Low liquidity can make it difficult to trade the token and may suggest a lack of genuine market interest or support. 

5. DappRadar’s blacklist

DappRadar offers a useful tool for identifying potential crypto scams: their community-driven blacklist. This feature allows users to contribute to a shared database of suspicious tokens.

To use this resource, simply check if the token you're researching is listed in the DappRadar blacklist on GitHub. If you find the token's address there, consider it a strong warning sign - tokens on this list are highly likely to be scams.

Additionally, if you've encountered a scam token yourself, you can contribute to the community's safety by submitting it to the blacklist. This simple act can help protect other investors from falling victim to the same scheme.

Final thoughts

Remember to use these tools as part of your broader research. A token's absence or presence of warnings should make you cautious, but always combine this with other verification methods for a complete picture.

Whether you're investing or simply observing, new cryptocurrencies and tokens offer a unique window into the evolving narrative of cryptocurrency. They remind us that in the digital age, finance isn't just about numbers; it's about stories, cultures, and communities. As this corner of the crypto world continues to evolve, it will undoubtedly provide both entertainment and lessons in the broader dialogue about the future of digital assets and their impact on society.

‍

In the colorful and often chaotic world of crypto, there exists a quirky corner dominated by what are affectionately known as “memecoins." These digital assets, born from the memes and trends that dominate online culture, are the playful jesters of the crypto kingdom. Despite their playful charm, memecoins are often caught up in pump-and-dump schemes and other scams, making them quite the rollercoaster ride. Their volatility is high, and the risk is real.

What draws people to these digital jokes? Simple, some memecoins have handed out enormous returns to those daring enough to dive in. However, while memecoins may gain popularity via social media, endorsements or fan communities, they often lack intrinsic utility. That makes them vulnerable to scams because of a low barrier to creation, hype-driven valuations, and little oversight. In many cases, the money made by early buyers or insiders comes directly from later retail investors in a negative-sum game. Because of this speculative nature, these tokens can attract opportunistic actors aiming to profit quickly at the expense of others.

So, with a whole galaxy of memecoins out there, how do you spot the stars from the scams? Stick around for some handy tips.

What Makes Memecoins Popular? 

Memecoins, like the iconic Dogecoin or Shiba Inu, often start as jokes, are often associated with entertainment rather than usability, and often gain traction thanks to the power of community, social media, and, occasionally, celebrity endorsements.

Unlike more traditional cryptocurrencies such as Bitcoin or Ethereum, memecoins generally lack complex technology or specific use cases. They're not about solving grand technological challenges but rather are about capturing the spirit of the internet in a tokenised form. This means that their value is often driven by pure enthusiasm, online buzz, and the thrill of being part of a viral movement.
‍
So why are these coins so popular? The appeal of memecoins lies in their accessibility and the sense of belonging they create. They're fun, easy to understand, and often tied to shared cultural experiences that resonate with a broad audience. The sense of community and the potential possibility of rapid gains draw people in, making some memecoins a fascinating aspect of the crypto landscape.

‍The Downside to Memecoin’s Popularity

Lately, memecoins have been the talk of the town, sparking a wave of enthusiasm, and unfortunately, a spike in scams too. Navigating the crypto market's more playful corner requires a keen eye. Before you leap into a memecoin, take a good look at the project and the brains behind it, as well as its development plan and the project’s overall transparency.

It's wise to tread carefully in these waters and resist the urge to jump in just because a memecoin is all the rage.

Common Types of Memecoin Scams

Scammers have refined their playbook to exploit FOMO, trust in influencers, and the general chaos of low-cap tokens. Some scams are obvious in hindsight, but many are sophisticated enough to fool even experienced traders. The key is knowing what to look for before you do anything. Whether it's a coordinated pump-and-dump or a malicious smart contract designed to trap your funds, these schemes all share common patterns. Let's break down the major scam types you're most likely to encounter, and the red flags that should make you think twice.

• Rug Pulls
  Scammers launch a token, build hype, attract liquidity, then withdraw the funds (pull the rug) leaving the token worthless.
• Pump-and-Dump Schemes
  Coordinated groups inflate a token's price (often with influencer shilling), then dump it at a high. Late investors are left holding the bag.
• Celebrity Scams
  Scammers exploit trust by faking endorsements or hijacking social media accounts of well-known figures.
• Fake Partnerships & Endorsements
  Polished websites, vague whitepapers and purported brand deals are used to convey legitimacy, despite little substance.
• Technical Exploits
  Memecoins may embed malicious smart-contract code, honeypots or unlimited minting rights for the devs, enabling extraction of funds.
• Insider Trading & Market Manipulation
  Whales, early wallets and wash-trading inflate token value while retail buyers enter too late. Scam clusters often reuse contracts and patterns.

How to Spot a Memecoin from a Scam

• Beyond jokes and buzz
  The initial charm of a memecoin may come from its humour, but lasting appeal requires more substance. Look for memecoins that offer real utility and a role within a broader ecosystem, these are signs of a coin that could stick around.
• Transparency is key
  Steer clear of memecoins shrouded in mystery, where details about the team and their updates are scarce. A trustworthy memecoin project is open about its progress and the people behind it.
• Security measures
  Given that memecoins often attract the attention of hackers, robust security is a must. A credible memecoin will have undergone thorough security audits and checks. If a coin lacks evidence of strong security measures, it's a red flag.
• Community strength
  A vibrant and active community is crucial for a memecoin's success. Memecoins that are driven by their communities tend to have a more promising future, thriving on the collective support and engagement of their members.

‍

As memecoins continue to capture the imagination of the online world, they've also caught the eye of regulators. The wild, unregulated environment in which these coins thrive poses challenges for authorities trying to protect consumers from potential scams or market manipulation. Despite this, the decentralised nature of most memecoins makes regulation a complex issue, leaving this corner of the crypto world as something of a digital Wild West.

Who’s at Risk of Memecoin Scams?

Memecoins tend to pull in younger investors who are drawn by viral marketing, FOMO, and the thrill of high-risk bets. For many, it's less about fundamentals and more about the rush, the community, or simply being part of the next big thing. Investors with limited experience, shaky financial planning, or an appetite for risk seem to be especially susceptible. When you combine that with fast-moving markets and social media hype, it's easy to see why so many get caught up in the chaos.

Conclusion

Memecoins are the whimsical, unpredictable, and culturally significant players in the cryptocurrency arena. They bring together the lightheartedness of internet memes with the fast-paced world of digital assets, creating a unique blend of humour and speculation. Whether you're laughing with them or at them, memecoins have undeniably become a fascinating part of the crypto narrative.

However, the very traits that make memecoins so appealing (i.e. their viral nature and community-driven buzz) also make them a hotspot for speculative bubbles and financial mishaps. As they continue to captivate the imagination of the online masses, they also pose significant challenges and risks, often operating in the murky waters of regulatory oversight. This unregulated and often wild market dynamic invites both opportunistic gains and blatant scammers.

For enthusiasts and investors alike, navigating this landscape means staying informed, vigilant, and discerning. Understanding the signs of a genuine memecoin versus a scam is crucial. It's not just about the initial buzz or the humour; it's about the underlying value, security measures, transparency, and community engagement that support the token's longevity and potential growth.

‍