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Core Thesis Coinbase predicts that the cryptocurrency market is poised for a recovery in December following a sluggish November. The firm believes the market is at an "inflection point" that could signal the start of a broader rally heading into 2026.
Key Drivers for Recovery
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Federal Reserve Rate Cuts: The primary driver is the market's high expectation of a rate cut by the Federal Reserve. As of early December, traders were assigning an approximately 92% probability to a rate cut, a scenario that historically boosts interest in risk assets like crypto.
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Improving Liquidity: Coinbase points to its internal global M2 liquidity gauge, which has begun to rise again. An expansion in global money supply typically correlates with strong performance for Bitcoin and the wider crypto market.
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Macro & Market Positioning: The report notes that the market has undergone a "healthy reset" after a soft November. With the U.S. dollar weakening and fears of an "AI bubble" bursting proving unfounded so far, macro conditions are shifting to support asset prices.
Outlook Coinbase views the recent market pullback not as a deterioration but as a setup for a rebound. If these trends—specifically rising liquidity and favorable Fed policy—continue, the firm suggests this period could mark the beginning of a sustained recovery phase.