Crypto Markets Poised for Potential December Rebound as Liquidity and Macro Signals Improve

Crypto markets may be setting up for a December recovery, according to a new report from Coinbase Institutional, which highlights strengthening liquidity conditions and shifting macroeconomic signals that could benefit major digital assets like bitcoin. The firm noted that expectations for a Federal Reserve rate cut have surged ahead of next week’s meeting, with probabilities now reaching 93% on Polymarket and 86% on the CME FedWatch tool. Such a move is typically seen as supportive for risk assets, potentially boosting investor appetite for cryptocurrencies.

Coinbase pointed to improvements in its internal M2 liquidity index—which monitors monetary flows influencing asset prices—as another encouraging factor. Earlier this year, the firm anticipated a quieter November followed by renewed market momentum, and current indicators appear to align with that outlook. Despite being lower on the week, bitcoin has begun to lift off its recent lows, a move some analysts believe is tied to increasing institutional interest and supportive news headlines.

Additional tailwinds may also be forming. The AI-driven market bubble that many expected to deflate has not yet materialized, which Coinbase suggests could continue fueling broader risk sentiment. A weakening U.S. dollar is adding further support, potentially making assets like bitcoin more attractive on a relative basis.

Institutional developments have likewise contributed to renewed optimism. Vanguard’s reversal of its crypto ETF stance and Bank of America’s decision to allow wealth advisers to recommend crypto allocations of up to 4% have both been cited as signals of growing mainstream acceptance. While market conditions remain volatile, these combined factors are strengthening the case for a possible December rebound, positioning bitcoin and the broader crypto market for a potentially stronger finish to the year.