Just as bonus season arrives, the best bargains on secondhand Rolexes may be coming to an end.

The Bloomberg Subdial Watch Index, which tracks the 50 most-traded Swiss watches by transaction value, was flat in December and January, though Subdial’s Rolex Index has eked out a small gain since the end of November, after more than a year and a half of steep declines.

This is following a somewhat seasonal pattern now—the market for used watches slumped in spring 2022, then improved by the end of the year and the beginning of 2023, only to fall back sharply again. This year’s stability, however, will depend on a few key things—from expectations of interest-rate cuts being met and inventories moderating to, importantly, the growing online culture around watch collecting.

To recap: Demand for secondhand watches exploded during the pandemic, as men spent stimulus checks, crypto gains and travel money on fancy timepieces—and then took to TikTok to talk about them. Experienced collectors and novices alike wanted to get their hands on the holy trinity of hype: the Rolex Daytona, Patek Philippe Nautilus and Audemars Piguet Royal Oak, sending them soaring in value.

Then in 2022, stock markets whipsawed, crypto slumped, and inflation and interest rates soared, forcing many speculators who had used leverage to amass large collections over the preceding five years to sell. Meanwhile, financial and geopolitical uncertainty, as well as Chinese lockdowns, all depressed the market. A year later, just as some green shoots were emerging, the collapse of Silicon Valley Bank, job cuts across the tech industry and continued rate hikes kept buyers away again.

Cracks are now appearing in the market for new watches. While the very high-end is holding up—both in the secondary market, where players such as A Collected Man operate, and in retail, where independent family-owned watchmaker H.Moser & Cie enjoyed a more than 40% uplift in sales last year—the mid-market is weakening.

Richemont is benefiting from a renaissance in Cartier watches. This is reflected in both retail sales and resilient secondhand values, which rose 1% in the fourth quarter, according to research platform WatchCharts and Morgan Stanley. But sales of new models at Richemont’s specialist watchmakers division, which includes Panerai, A. Lange & Sohne, Vacheron Constantin and Jaeger-LeCoultre, have slowed.

Although waiting lists for Rolexes are still growing at Watches of Switzerland Group Plc, the retailer warned on profit last week after British consumers pulled back from mid-market products and unbranded jewellery. Meanwhile, Chinese buyers haven’t roared back as expected, keeping sales at home and in Europe in check.

For the primary market to stave off too much of a decline, and for the current calm in the secondary market to hold, interest-rate cuts must materialize. Cheap money likely played a significant role in fueling demand for top timepieces. Lower rates would ease the pressure on leveraged collectors and encourage buyers to transfer their savings from high-interest accounts to their wrists. There can also be no nasty shocks in terms of job losses or a stock market rout.

Buyers need confidence, too, that further large stocks of models won’t make their way on to the secondary market. Here, there are some grounds for optimism. After inventory levels reached all-time highs in 2022, the supply of Rolexes to the secondary market was flat last year compared with the year earlier, while stocks of Patek Philippe were down 2% and supply of Audemars Piguet was 10% lower, according to WatchCharts and Morgan Stanley.

However, it’s worth noting that inventory for the big three brands remains historically elevated and is aging, indicating that some dealers are still sitting on unrealized losses on older stock that could yet come on to the market.

Even so, we are probably nearer the bottom of the secondary market than the top (although it did look like we were at this point a year ago). And after a turbulent 2023 in stock markets and little M&A activity, investment banking bonuses may be lower, creating a headwind in the short-term.

But there is one factor that could keep both new and secondhand watches at the forefront of consumers’ minds: the culture around timepieces that has developed over the last five to 10 years.

While many women might long for a Hermes Kelly or Birkin bag, for many men, the luxury object of their desire is often a watch. And for most of them, it’s the obvious names—led by Rolex—that signal affluence and belonging to a discerning club.

Enthusiasm exploded across online platforms during the pandemic, as locked down consumers graduated from stockpiling sneakers to spending hours discussing Rolex models, such as the palm-leaf deal, dubbed the “Weed,” on Reddit. Watch lovers now connect via Instagram and TikTok, and consume specialist media such as Hodinkee, a New York City-based watch website. Whereas collecting may have been a lonely hobby 20 years ago, now it’s a thriving community. Many enthusiasts have Instagram accounts dedicated solely to their timepieces. WatchTok is gaining ground, too, with the hashtag #expensivewatch garnering 11.2 million views on TikTok. 

Smaller watches—think Timothee Chalamet and his 23mm Cartier Panthere—perhaps a sign of styles to come. Recently, interest has risen in the 1970s Polo models made by fellow Richemont brand Piaget. Quiet luxury is coming for watches, which may reflect changing tastes or the fact that thefts are on the rise. Metropolitan Police recently went undercover to catch “Rolex Ripper” gangs in London’s West End. Fear of falling prey could encourage buyers to choose less immediately identifiable models.

From spotting the next grail watch on tastemakers’ wrists to obsessing over the latest outlandish Rolex, watch culture underlines how timepieces can become an expensive habit. Once you have satisfied your craving with one hype model, another one comes along to lust after. With the precarious state of luxury demand, manufacturers will be hoping that the cadre of new collectors don’t quit cold turkey any time soon.

Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times.