Buying presents for Christmas is IMO not at all about showing off wealth to neighbours, but about helping to make some people happy, even if a little bit. I'm not a supporter of overspending, but I also think it's very wrong when well-off parents give no presents or very cheap presents to their children because children need to be loved and cared for. Also, some things can actually last for a long time and be of high significance in various relationships, and sometimes people need to sell their BTC not to buy expensive presents but to buy any presents for their loved ones. So I believe people should first and foremost treat Bitcoin as money and money should be spent when there is a need to spend it or when spending it can lead to positive improvements of someone's lives.
Don't sell your Bitcoin to buy stuffs that will perish few days or weeks after Christmas.
When I was in school, Gobseck by Honoré de Balzac was a mandatory reading. It's a story about a wealthy man who died without spending any of his wealth and living a very frugal life. It's a reminder that people should also enjoy the present and not live only for the future.
If you're even denying yourself a Christmas, then what sort of memories are you creating? Years from now you might look back and realize that you wasted your best years not doing anything, only waiting for Bitcoin to go up. And worse, when Bitcoin does go up, people often fail to take profits and then wait for the bull cycle again.
There can't be any objective rule for managing your Bitcoin investment, because value and time preferences are subjective. In some cases it could indeed be a bad idea to sell Bitcoin to buy a Christmas gift, in other it is not.
Also had Gobseck as obligatory reading at school, and totally agree with your point.