December holds a special place in the crypto calendar. While traditional financial markets tend to slow down toward year-end, the digital asset sector — and especially the highly volatile memecoin segment — often comes to life. Historical data, market structure and investor behaviour all suggest that the final month of 2025 could once again lay the groundwork for a powerful rally. So what is really behind the potential “Santa Rally” in the crypto market?
A mix of technically oversold memecoins, thin order-book liquidity, tax-driven positioning and the unique psychology of the holiday season can create the perfect setup for sharp moves in Dogecoin, Shiba Inu, Pepe and other meme favourites.
Low liquidity: how market makers amplify price moves
The most underestimated technical driver of December “pumps” is market microstructure. To see why memecoins often rally into year-end, you need to understand how order books work and what role market makers (MMs) play.
Toward the end of the year, many institutional trading desks and professional market makers wind down risk. Hedge funds prefer to protect their yearly PnL rather than take fresh exposure in the last weeks of December. The result is a sharp drop in market depth.
In normal conditions, it takes substantial buying volume to push a mid-cap memecoin 5% higher. In December, when order books are thin, the same move can be triggered with far less capital. Volatility jumps. Retail traders placing market orders during the holidays “chew through” the order book much faster, printing large green candles that in turn attract bots and algos programmed to chase momentum. This is how a self-reinforcing rally can form: small demand + low liquidity = outsized price swings.
Bonuses, year-end payouts and cash gifts: how money flows into memecoins
Memecoins are powered almost entirely by retail liquidity. December is also the month when households receive bonuses, year-end payouts and 13th salaries. Conservative investors use this cash for ETF contributions or to add to their Bitcoin stack. Gen Z and Millennials, however, often steer a slice of this “extra money” into high-risk assets with asymmetric upside — like memecoins.
The psychology is simple: bonuses and cash gifts are seen as non-essential income, so the willingness to take risk is much higher compared with regular salary. Young investors also tend to put this money to work quickly. Since crypto exchanges run 24/7 — including over the holidays — part of this capital flows straight into the market when traditional exchanges are closed.
The social nature of memecoins: free time and viral conversations
Memecoins are a social phenomenon. They do not spread through whitepapers or technical milestones, but through memes, narratives and social proof.
December is one of the few times when friends and families spend long periods together offline. A casual conversation at the holiday table about a big win on BONK or PEPE can trigger instant FOMO. Today, setting up a wallet and making a first trade is simple enough to happen right on the spot.
Free time is another powerful catalyst. Stock markets are closed, many sports events pause, but the crypto market never sleeps. Screen time on TikTok and X surges during the holidays — and that is exactly where memecoins are pushed most aggressively.
Taxes and loss harvesting: why rallies often start after a dip
Every December, many traders sell losing positions to harvest tax losses and offset capital gains. This creates extra selling pressure early in the month. By the second half of December, however, most tax-motivated selling is done, supply dries up — and buyers begin to dominate. That shift often becomes the spark for a rally.
In several jurisdictions, “wash-sale rules” prevent investors from immediately buying back an asset sold for tax purposes — but for crypto, such rules either do not apply yet or are poorly enforced. As a result, investors can sell memecoins on 28 December and buy them back on the 29th. These synchronized buy-backs create strong upside pressure on prices.
Why Solana often beats Ethereum during memecoin season
Memecoin manias are driven by small-ticket, hyper-speculative trades — which makes transaction fees crucial. On Ethereum, gas costs can spike during hype phases and push smaller players out. Solana and newer L2 networks (such as Base) offer much lower fees, so memecoins there can move faster and attract more retail flow.
On top of that, the “unit bias” effect kicks in: newcomers prefer to buy millions of ultra-cheap tokens rather than a tiny fraction of Bitcoin. It is a cognitive bias, but memecoins are built to exploit it perfectly.
The January effect — and why crypto front-runs it in December
In traditional finance, the “January effect” describes a tendency for asset prices to rise at the start of the year as new capital enters markets. In crypto, traders try to front-run this pattern by buying in mid- to late December. Over time, this has shifted much of the move from January into December.
Examples:
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DOGE 2020/21 — retail attention and early accumulation started in late December, ahead of the major rally in spring 2021.
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BONK 2022 — Solana’s comeback token, airdropped at the depth of post-FTX capitulation in the lowest-liquidity week of the year.
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AVAX memes 2023 — rotation into the Avalanche ecosystem, fuelled by low fees and a speculative year-end mood.
Risks: not just upside, but a trap for late retail
The same low liquidity that can launch prices higher also allows large holders to dump into retail buying, using holiday demand as exit liquidity. A classic pattern: a strong run-up into 24 December followed by a sharp sell-off over the holidays.
On top of that:
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December often sees a surge in new scam tokens and rug pulls,
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network fees can eat up most of the profit on smaller trades,
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many “holiday hype” coins correct sharply in January or February once liquidity normalizes.
Bottom line: December is an opportunity — but a risky one
Overall, the evidence suggests that the odds of a selective “Santa Rally” in memecoins are meaningful. December can offer a tactical window for short-term entries into oversold meme assets — but only with a clear plan to lock in profits on strong moves. This is not long-term investing; it is high-risk speculation. History shows that January and February often bring heavy corrections after holiday pumps, which is why memecoins — and many altcoins — are better treated as a short-term trade rather than a passive, long-term holding in this context.
One thing is certain: the crypto market is rarely quiet in December. Whether the move turns out bullish or bearish is impossible to know in advance – FORECK.INFO
Where to trade during a potential memecoin spike: why crypto exchange ratings matter
Any year-end surge in high-risk assets will almost inevitably be accompanied by a jump in trading volumes. At the same time, trading efficiency depends not only on which memecoin you choose, but also on where you execute. Thin order books, latency or inflated fees on certain exchanges can quickly erode profits, especially in fast-moving markets.
That is why, when assessing the odds of a December Santa Rally, it is important to look not only at coins, but also at venues. On FORECK.INFO you will already find an up-to-date crypto exchange best that takes into account:
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order-book depth,
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fees during periods of high volatility,
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access to key memecoin ecosystems (Solana, Base, Ethereum),
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trading security and exchange-level risk metrics.
For traders planning to operate in highly volatile assets, such a ranking is less a forecast and more a practical risk- and liquidity-management tool for entering and exiting positions.
