Bitcoin eyes December rebound on Fed tailwinds, says Coinbase
Coinbase Institutional expects a December rebound for crypto markets, citing stronger global M2 liquidity and a higher probability of lower interest rates, while noting that any hawkish messaging from Federal Reserve officials could constrain gains.
In a research note published Friday, Coinbase said crypto “could be poised for a December recovery” as liquidity improves, Fed cut odds reach 92% (as of Dec 4), and broader macro tailwinds strengthen.
The exchange had previously forecast market “weakness” in October ahead of a “December reversal,” referencing its proprietary global M2 money supply index, which tracks the total outstanding fiat currency supply.
Source: Coinbase Institutional
Even so, Coinbase said sentiment remains dominated by caution, with both institutional and retail investors hesitant to deploy capital, leaving markets waiting for a sustained pickup in exchange-traded fund (ETF) inflows.
Fed policy signals seen as pivotal for Bitcoin into early 2026
Analysts also highlighted the potential for a “Santa rally” should the Fed cut rates, a seasonal pattern where assets often record short-term gains around Christmas.
Nic Puckrin, crypto analyst and co-founder of educational platform Coin Bureau, said Bitcoin’s (BTC) setup for the first quarter of 2026 may depend on comments from Fed Chair Jerome Powell. He noted that if the Fed cuts rates on December 10th and ends quantitative tightening (QT), little would stand in the way of a year-end rally, absent major geopolitical shocks. However, he added that investors will closely parse Powell’s press conference for clues on 2026 policy, and a hawkish tone could limit upside.
Other market participants linked November’s selling pressure to earlier hawkish remarks from Powell but anticipate a December recovery. Chris Kim, co-founder and CEO of Axis, an onchain quantitative trading fund managing $100 million in live capital, said the team is leaning toward a rebound with macro factors as the primary driver. From a technical standpoint, he pointed to a retest of the ~$80k area and the 100-week average, alongside incremental positives such as Vanguard enabling ETF trading.
Kim also cited speculation that National Economic Council Director Kevin Hassett could be named the next Fed Chair in early 2026, a development he said would likely signal a notably more dovish policy stance.
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