Coinbase expects the crypto market to embark on a strong recovery in December, driven by improved liquidity and decreased selling pressure from long-term Bitcoin holders.
On December 5, Coinbase, a U.S.-based crypto trading platform, indicated that market conditions have evolved in recent weeks, highlighting inflows of fresh capital, reduced spreads, and more pronounced macroeconomic support.
Liquidity conditions are improving with the Fed
The exchange highlighted an increase in expectations for a Federal Reserve rate cut, with the CME FedWatch showing nearly 90% odds for the December 10 meeting.
He added that the recovery of liquidity marks a clear turning point from the persistent outflows that characterized October and November.
Indeed, broader data on the money supply seems to support this thesis. Federal Reserve figures show that M2 has reached a record $22.3 trillion, surpassing its peak from early 2022 after a multi-year contraction, which is a rare fact.
Analysts often follow M2 to understand changes in liquidity and inflation expectations. Moreover, in the past, increased liquidity has coincided with better Bitcoin performance, given the asset's fixed supply of 21 million coins.
In parallel, Coinbase has stated that short positions on the dollar appear interesting at current levels, which could attract more risk-seeking investors to crypto.
Moreover, the company also argued that “AI trading” maintains its momentum and continues to drain funds towards digital asset sectors related to automation and computing demand.
Former Bitcoin holders are ceasing to sell.
Interestingly, on-chain indicators point in the same direction.
Darkfost, an on-chain researcher at CryptoQuant, stated that spending from Bitcoin wallets over five years old has significantly decreased after months of high activity from this group.
He noted that the average daily sales of these long-term holders have dropped to about 1,000 BTC from about 2,350 BTC on a 90-day moving average. This indicator often signals pressure from investors who have accumulated coins at historically lower price levels, particularly around $30,000.
Darkfost added that declines in UTXO activity and spent outputs indicate a decrease in pressure as the market cycle progresses. Thus, the reduction in sales from long-term holders offers Bitcoin more room to consolidate after a very turbulent autumn 2025.
« These data suggest that the selling pressure from OGs is easing, which offers a bit more room for the market. Interestingly, their selling pressure seems to decrease as the cycle progresses, with the STXO (90-jma) peaks of these OGs becoming lower and lower, » the analyst explained.
Taken together, the improvement in liquidity, favorable macroeconomic indicators, and the easing of supply pressure are setting the stage for a stronger December. Thus, if the momentum holds, Bitcoin could record its first positive December since 2023.
The moral of the story: A sad crypto autumn is not always a sign of a spoiled Christmas.
