Coinbase’s Bold Bitcoin Prediction for December 🤔

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Coinbase, that paragon of financial wisdom, now claims the crypto market will enter a recovery phase in December, as if the universe had finally decided to stop playing cruel jokes on investors.

On December 5, the US-based crypto trading platform, ever the optimist, declared that market conditions have shifted, as if the market had been on a vacation and just returned with a sunburn. They pointed to fresh capital inflows, tighter spreads, and stronger macro support-words that sound like a magician’s trick but are, alas, just numbers on a screen.

Liquidity Conditions Improve as Fed Cut Odds Rise

The exchange, with the enthusiasm of a child who just found a lost toy, highlighted a jump in expectations for a Federal Reserve rate cut. CME FedWatch, that reliable oracle of market whims, shows odds near 90 percent for the December 10 meeting. One can almost hear the Fed whispering, “We’re not ignoring you, we’re just… very busy.”

It added that the recovery in liquidity marks a sharp turn from the persistent outflows that defined October and November. A sharp turn, indeed-like a drunk man trying to dance the tango.

Indeed, broader money-supply data appear to support the thesis. Federal Reserve figures show M2 has climbed to a record $22.3 trillion, topping its early-2022 peak after a rare multiyear contraction. A triumph of inflation, perhaps? Or just the universe’s way of saying, “Here, have more money. You’ll regret it later.”

U.S. M2 Money Supply hits new all-time high of $22.3 Trillion 🤑📈🥳

– Barchart (@Barchart) December 5, 2025

Analysts often track M2 to understand shifts in liquidity and inflation expectations. Moreover, increased liquidity has historically aligned with stronger Bitcoin performance, given the asset’s fixed supply of 21 million coins. A fixed supply? How quaint. Like a library with no new books.

At the same time, Coinbase said short-dollar positioning looks appealing at current levels, which could draw more risk-seeking investors back into crypto. Risk-seeking? Or just risk-ignoring? The line is thin, like a Fed rate cut.

Additionally, the firm also argued that the so-called AI trade still has momentum and continues to pull money toward digital-asset sectors tied to automation and computing demand. Automation? Computing? What could possibly go wrong?

Long-Term Bitcoin Holders Pull Back From Selling

Notably, on-chain indicators point in the same direction. A direction that seems to lead nowhere, but let’s not question the path.

Darkfost, an on-chain researcher at CryptoQuant, said spending from Bitcoin wallets older than five years has fallen sharply after months of elevated activity from this cohort. Those long-term holders, those stoic veterans of the crypto wars, have finally decided to take a break from their relentless selling. A noble act, if not for the fact that they’re probably just waiting for the next crash.

He noted that average daily sales from these long-term holders have dropped to about 1,000 BTC from roughly 2,350 BTC on a 90-day moving basis. That metric often signals pressure from investors who accumulated coins at lower historical price bands, including around $30,000. A price band so low, it’s like a relic from the Stone Age.

Darkfost added that declines in UTXO and spent-output activity point to easing strain as the market cycle advances. So, the reduced selling from “OG” holders gives Bitcoin more room to consolidate after a volatile autumn. Consolidate? More like hibernate, perhaps.

“This data suggests that selling pressure from OGs is easing, which gives the market a bit more breathing room. It worth noting that their selling pressure appears to be decreasing as the cycle progresses, with the STXO peaks (90-dma) from these OGs becoming lower and lower,” the analyst explained.

Taken together, improving liquidity, supportive macro indicators, and softening supply pressure set the stage for a stronger December. If momentum holds, Bitcoin could record its first positive December finish since 2023. A positive finish? Or just a temporary reprieve before the next calamity? Only time-and the Fed-will tell. 🧠

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2025-12-06 15:02