I think many people really overestimate the effect of retail investor behavior on price action - no, prices are not dipping because people buy christmas presents

I first noticed this trend with the stimulus checks the US government issued due to COVID - back then there were a TON of threads, every time that happened, about what a huge effect it would have once every US citizen would get like $1,000 (or something like that, I didn't look up the details) and some would buy crypto with it. Of course it didn't.

Now it's similar with christmas. I've seen a couple of threads (e.g. this one) about whether christmas will influence the prices because people have to sell crypto to buy gifts. Many answers either state that yes, they will, or that the recent dips are because of this phenomenon. Think about that for a second: will prices dip because people that have so little money they have to liquidate their assets to buy gifts do so? Of. Course. Not. Let me explain to you why, using BTC as an example (but it would work with almost all other coins):

All data I'm using here is from CoinMarketCap.

• about 51% of all BTC addresses hold less than 0.001 BTC
• about 76% hold less than 0.01
• about 91% hold less than 0.1

You could therefore assume that many owners of these 91% of addresses are probably not rich - hell, 51% hold less than $50 in BTC, many are probably poor. Imagine if all of them - more than half of all BTC owners - sold their BTC to buy presents, BTC would drop so hard!

Except it wouldn't. Those 51% have 0.023% of all Bitcoin. You wouldn't even notice a tiny dip. All wallets below 0.1 BTC together only hold bout 1.2% of all BTC, all wallets below 1 BTC only hold a bit above 5% of all supply. Those small investors, of which only a small percentage will have to sell crypto to buy presents really, really don't matter for price action. The top 3 wallets have more than 100 times as much BTC as the lower 50% of all wallets.

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^{all those numbers are slightly misleading because some of those huge wallets are exchange wallets and people, especially if they don't have a ton, will just leave their coins there - so we don't know the exact numbers. This should, however, not change the general point I'm making here}

For some reason, some people like to think that crypto is not mostly a tool of the rich to get richer, but pretty much all coins are concentrated in the hands of a relatively small number of very rich people. What poor people, holding very little crypto, do, has no effect on prices.

tl;dr: no, people selling crypto to buy christmas presents won't affect prices even a tiny bit. Crypto is concentrated in the hands of the rich