Coinbase Predicts Crypto Recovery in December Amid Improved Liquidity

Coinbase Research Report Highlights

Coinbase released a report highlighting improved global liquidity at the start of December.
The probability of a Federal Reserve rate cut rose to 92% by December 4, potentially boosting risk assets.
A reversal in market trends is expected in December following weaker performance in November.

Federal Reserve Policy Impact

The Fed's involvement in the bond market may signal the end of quantitative tightening, reducing liquidity pressure.
Bitcoin fell over three standard deviations below its 90-day trend in November, indicating undervaluation.
Long-term holders distributed coins, and digital asset products traded below net asset value for the first time this year, suggesting a potential recovery.
US 10-year bond yield experienced a significant increase, posing challenges for risk-on assets.

Altcoin and Stablecoin Signals

Divergence observed between stablecoin dominance and altcoin performance.
Stablecoin strength showed signs of fatigue, while altcoins remained steady.
If Bitcoin stabilizes, capital may rotate back to altcoins, which could accelerate as liquidity shifts towards higher-risk assets.

Source: Ted Pillows