OVERVIEW

A Christmas Miracle: My Portfolio is Only Down 13% Today 😶

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total market and altcoin market cap charts:

TECHNICAL ANALYSIS
How Bitcoin, Ethereum, & XRP Have Historically Performed in Q1

Q1 looks great on paper - until you realize a handful of monster years are doing all the heavy lifting. The gap between average and median returns tells the real story. 📖 

Today we’re going to look at how Bitcoin, Ethereum, and XRP have historically performed in Q1.

Across all three assets:

• Q1 win rate: 57%

• Average Q1 return: +55%

• But the median Q1 return? Just +3%

Most Q1s are modest. A few are crazy. Here's how each asset stacks up. 👀 

TECHNICAL ANALYSIS
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• Altcoin damage check: gaming holding up best, DeFi lagging, meme coins worst (down 56%)

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TECHNICAL ANALYSIS
Bitcoin 🪙

• Q1 Win Rate: 53% (8 positive, 7 negative)

• Average Q1 Return: +58.7%

• Median Q1 Return: +4.3%

• Best Q1: +589% (2013)

• Worst Q1: -50% (2018)

Where Q1 Ranks

Q1 is Bitcoin's 3rd best quarter - not the powerhouse most assume.

• Q2 leads at +155% avg

• Q4 is second at +75% avg

• Q3 is the graveyard at +5% avg

The Halving Cycle Effect

Post-halving Q1s average +173% vs just +15% in halving years.

But 2025 broke the pattern - first negative post-halving Q1 ever (-13%). Prior post-halving Q1s: +589% (2013), +12% (2017), +103% (2021).

Monthly Breakdown Within Q1

• January: +10% avg, 67% win rate

• February: +15% avg, 73% win rate ← the money month

• March: +10% avg, 40% win rate ← the trap

Q1 as a Year Predictor

BTC's Q1-to-year correlation is 0.946

• Every positive Q1 led to a positive full year (100%)

• Negative Q1s? Only 43% of those years finished green

Momentum vs Mean Reversion

• Q1 after positive Q4: +83% avg

• Q1 after negative Q4: +11% avg

Look at BTC from this perspective alone, it’s definitely a momentum asset - strength begets strength. 💪 

TECHNICAL ANALYSIS
Ethereum 🥈

• Q1 Win Rate: 67% (6 positive, 3 negative)

• Average Q1 Return: +76.6%

• Median Q1 Return: +7.5%

• Best Q1: +509% (2017)

• Worst Q1: -47% (2018)

Where Q1 Ranks

Q1 is Ethereum's best quarter - the only major crypto where this is true.

• Q2 is second at +64% avg

• Q4 is third at +19% avg

• Q3 trails at +7% avg

Monthly Breakdown Within Q1

• January: +21% avg, 67% win rate

• February: +12% avg, 78% win rate ← highest win rate

• March: +20% avg, 67% win rate

ETH spreads Q1 gains more evenly than BTC - no single month dominates.

Q1 As A Year’s Predictor

ETH's Q1-to-year correlation is 0.943

• Positive Q1 and a positive year: 83%

• Negative Q1 and a positive year: 0%

Read that again. Every negative ETH Q1 has preceded a negative full year. But there’s only three in this data set so that might not mean anything.

Mean Reversion Is Massive

• Q1 after positive Q4: +24% avg

• Q1 after negative Q4: +143% avg

ETH is the opposite of BTC. Bad Q4s set up monster Q1s. 🤯 

TECHNICAL ANALYSIS
XRP ✖️

• Q1 Win Rate: 55% (6 positive, 5 negative)

• Average Q1 Return: +31.4%

• Median Q1 Return: +0.3%

• Best Q1: +229% (2017)

• Worst Q1: -75% (2018)

Where Q1 Ranks

Q1 is XRP's 3rd best quarter.

• Q2 leads at +93% avg

• Q4 is second at +88% avg (but only 27% win rate - huge outliers driving the avg)

• Q3 trails at +9% avg

Monthly Breakdown Within Q1

• January: +13% avg, 50% win rate

• February: -3% avg, 36% win rate ← historically weak

• March: +24% avg, 45% win rate ← late Q1 surge

XRP's Q1 gains are backloaded into March. February is a minefield.

Q1 as a Year Predictor

XRP's Q1-to-year correlation is 0.737 (weaker than BTC/ETH but still meaningful)

• Positive Q1 and a positive year: 83%

• Negative Q1 and a positive year: 20%

Mean Reversion Dominates

• Q1 after positive Q4: -24% avg

• Q1 after negative Q4: +67% avg

XRP shows the strongest mean reversion of the three. If Q4 rips, expect Q1 to fade. 🫡 

TECHNICAL ANALYSIS
What This Means for Q1 2026 🤔 

Q4 2025 is shaping up negative across the board (as of December 23, 2025). ❎ 

Based on the historical patterns:

BTC: Negative Q4 going into Q1 averages just +11%. Bitcoin's momentum-driven nature means weakness tends to carry forward. Not ideal.

ETH: This is where it gets interesting. A negative Q4 before Q1 has averages of +143%. ETH's mean reversion tendency is extreme - and Q1 is already its best quarter. The historical setup is as bullish as it gets.

XRP: Negative Q4 going into Q1 averages +67%. Strong mean reversion, though February remains a danger zone. March is historically where XRP's Q1 gains materialize.

Cycle Positioning

2026 is a "Year 2" in the BTC halving cycle - not a halving year, not post-halving. Historical Q1 returns in Year 2:

• 2014: -45% (bear market)

• 2018: -50% (bear market)

• 2022: -2% (bear market)

The pattern isn't encouraging - every Year 2 Q1 has been negative for Bitcoin. But 2026 enters from a different setup than prior Year 2s, which all followed blow-off(ish) tops. 🚀 

TECHNICAL ANALYSIS
TL;DR 🩳

For BTC:

• Q1 isn't the best quarter - Q2 is

• February is where the money's made (73% win rate)

• Momentum matters: weak Q4 meanas a historically weak Q1

• Year 2 of halving cycle has been rough historically

For ETH:

• Q1 actually IS ETH's best quarter

• Mean reversion is your friend: bad Q4 = setup for Q1

• Every negative Q1 has preceded a negative year (0% escape rate)

• Historical setup for Q1 2026 is strong

For XRP:

• February is the danger zone (-3% avg, 36% win rate)

• March is when Q1 gains materialize

• Positive Q4s lead to negative Q1s

• Negative Q4 2025 sets up potential +67% avg Q1

The universalish truth: Q1 performance correlates strongly with full-year returns across all three assets. If Q1 goes green, the odds favor a green year. If Q1 bleeds, buckle up. 💺

Data spans August 2010-December 2025 (BTC), April 2016-December 2025 (ETH), February 2015-December 2025 (XRP).

LINKS
Links That Don’t Suck 🔗

💶 Ethereum Dominates Tokenized Euro Market With 50% Share

🧠 Michael Saylor Says He Urged Bank Of America’s CEO To Rethink Crypto Policy

🗾 Japan’s Local Governments May Soon Issue Bonds On-Chain: Report

🫂 Solana and Cardano Co-Founders Back Calls For Interoperability Bridge

Get In Touch 📬

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Author Disclosure: The author of this newsletter holds positions in AVAX, ADA, PUDGY, WLC, IMX, XTZ, NEAR, HBAR, ALGO, INJ, LTC, LINK, ZEC, XLM, and FET. 📋