Btc Poised For December Recovery On ‘macro Tailwinds,' Fed Rate...

Coinbase predicts a December recovery driven by rising global M2 liquidity and lower interest rates, but Fed Chair Powell’s remarks may limit upside, analysts say.

Bitcoin's ‘Santa’ rally may be ignited by macroeconomic tailwinds, including the Federal Reserve’s incoming interest rate decision, but fearful investor sentiment may take another hit by any hawkish remarks from central bank officials.

Improving liquidity conditions and rising odds of a Federal Reserve interest rate cut may catalyze a recovery in the crypto market during December, according to Coinbase Institutional.

“We think crypto could be poised for a December recovery as liquidity improves, Fed cut odds jump to 92% (as of Dec 4), and macro tailwinds build,” wrote Coinbase in a Friday research report.

In October, Coinbase predicted “weakness” in the crypto market ahead of a “December reversal,” based on its custom global M2 money supply index, which measures the total outstanding fiat currency supply.

Still, market sentiment remains “dominated” by fear, as institutional and retail capital remain “hesitant to step in,” leaving markets in limbo ahead of a recovery in exchange-traded fund (ETF) inflows, Coinbase said.

Related: Bitcoin treads water at $90K as whales eat the Ethereum dip: Finance Redefined

Market analysts also flagged the possibility of a “Santa rally” following the Fed’s rate cut — a market pattern in which assets see short-term gains around Christmas.

Bitcoin's (BTC) prospects for the first quarter of 2026 may hinge more on the remarks of Federal Reserve Chair Jerome Powell, according to Nic Puckrin, crypto analyst and co-founder of Coin Bureau educational platform. He told Cointelegraph:

“However, investors will scrutinise Jerome Powell’s every word during the press conference to get a glimpse into 2026 monetary policy, and any hawkishness could put a lid on the rally,” he said.

Source: CoinTelegraph