The crypto market appears to be setting the stage for a meaningful rebound, and Coinbase Institutional is optimistic about what lies ahead. According to its latest outlook, December could mark a strong recovery as market liquidity improves and expectations rise for a potential Federal Reserve rate cut.
With investors returning and sentiment gradually lifting, digital assets are once again capturing the spotlight.
Liquidity Floodgates Open
A fresh wave of liquidity is sweeping through global markets, and crypto is benefiting directly from it. With the odds of a Federal Reserve rate cut now above 90% for the upcoming meeting, investor confidence is climbing fast. Tighter trading spreads are making it easier and more efficient for traders to move in and out of digital assets.
Adding to the momentum, the U.S. monetary supply (M2) has surged to a new record high of $22.3 trillion, surpassing all previous peaks. This expansion signals a stronger financial backdrop — one that could continue fueling activity across the crypto landscape.
Long-Term Holders Stay Steady
On-chain data shows that long-term Bitcoin holders are tightening their grip, creating a more stable market environment. Wallets that have been dormant for over five years are now selling only about 1,000 BTC per day, a sharp decline from the 90-day average of 2,350 BTC.
This drop in selling activity eases supply pressure and helps support price stability — a key ingredient for any sustained recovery in Bitcoin’s value.
December: The Month to Watch
According to Coinbase analysts, December could be the turning point — potentially delivering Bitcoin’s first positive monthly close since 2023. As short-dollar trades become more appealing, risk-tolerant investors are gradually stepping back into the market.
At the same time, interest in the broader tech sector is rising. The “AI trade” is gaining serious traction, with investors eyeing crypto projects that intersect with artificial intelligence and high-performance computing. This trend could shape the next wave of momentum across the digital asset landscape.
Investor Insights: What to Expect
With liquidity improving, macroeconomic conditions turning favorable, and long-term Bitcoin holders refusing to sell, the crypto market is entering a phase of renewed strength. These combined factors position digital assets for a potentially powerful finish to 2025.
For investors, this is a moment to watch closely. Shifts in liquidity, monetary policy, and on-chain behavior could open the door to fresh opportunities — whether for portfolio growth, strategic diversification, or early positioning ahead of the next market cycle.
Quick Snapshot
Here’s a fast, at-a-glance look at what’s shaping the crypto market right now:
- Crypto liquidity is sitting at multi-year highs
- Odds of a Federal Reserve rate cut have climbed above 90%
- Long-term Bitcoin holders are offloading far less BTC
- December is shaping up to be a potentially strong month for the market
Together, these factors paint a clear picture of improving sentiment and strengthening market conditions. This refreshed overview offers readers a crisp narrative, meaningful insights, and practical takeaways — all backed by the latest analysis from Coinbase and other leading financial sources.