Bitcoin May Rebound in December on Rising Liquidity and Fed Cut Odds, Coinbase Says

• Coinbase highlights rising global liquidity as a key driver for Bitcoin’s potential December rebound.

• Federal Reserve rate cut expectations stand at 92%, boosting market optimism amid cautious sentiment.

• Analysts point to the December 10 Fed decision and end of quantitative tightening, with Bitcoin retesting the $80,000 level as a support zone.

Discover why Coinbase predicts a Bitcoin December rebound amid Fed rate cuts and liquidity surge. Explore market impacts and expert insights for informed crypto strategies today.

What is the Expected Bitcoin December Rebound According to Coinbase?

The Bitcoin December rebound refers to a projected recovery in Bitcoin’s price during December 2025, as forecasted by Coinbase Institutional. This outlook is supported by increasing global liquidity, a 92% probability of a 25-basis-point Federal Reserve rate cut on December 10, and the recent conclusion of quantitative tightening on December 1. These factors collectively aim to ease financial conditions and encourage investor participation in risk assets like cryptocurrencies.

How Will Federal Reserve Policy Expectations Shape the Crypto Market?

Federal Reserve policy expectations are pivotal in influencing the crypto market’s trajectory, particularly through interest rate decisions that affect liquidity and borrowing costs. As of December 4, 2025, market pricing indicated a 92% likelihood of a rate cut, according to data from CME FedWatch Tool referenced in Coinbase’s analysis. This dovish stance could lower yields on traditional assets, prompting capital flows into Bitcoin and other digital currencies seeking higher returns. The end of quantitative tightening further amplifies this effect by reducing the Fed’s balance sheet runoff, injecting more liquidity into the financial system. Experts from Coinbase Institutional note that such measures historically correlate with upticks in asset prices, with Bitcoin often leading risk-on rallies. Short sentences highlight the mechanics: rate cuts reduce opportunity costs for holding non-yielding assets like Bitcoin; improved liquidity supports broader market participation; and clearer policy signals mitigate uncertainty. Supporting statistics show that post-rate cut periods in previous cycles, such as 2020, saw Bitcoin gains exceeding 50% within months, per historical market data. While current sentiment remains tempered by recent November pressures, analysts emphasize that Jerome Powell’s upcoming remarks could solidify expectations for a more accommodative 2026, potentially fostering sustained momentum in crypto valuations.

Frequently Asked Questions

What Factors Are Driving the Bitcoin December Rebound Prediction?

The Bitcoin December rebound prediction is primarily driven by rising global liquidity as measured by Coinbase’s custom M2 index, which showed an upward shift after months of stagnation. Strong Fed rate cut odds at 92% and the end of quantitative tightening on December 1, 2025, further bolster this view, encouraging institutional inflows and reducing market fears.

Will Jerome Powell’s December Remarks Impact Bitcoin Prices?

Jerome Powell’s December 10, 2025, remarks will likely influence Bitcoin prices by clarifying the Federal Reserve’s path for 2026 rate policy. A dovish tone confirming additional easing could spark immediate buying, as investors interpret it as supportive of risk assets. This natural alignment with voice search queries underscores how central bank communication shapes crypto’s volatile yet responsive market dynamics.

Coinbase’s analysis extends beyond immediate policy moves, incorporating broader economic indicators to assess Bitcoin’s resilience. The firm’s research underscores that while November saw Bitcoin dip below key support levels, the cryptocurrency has since stabilized around the $80,000 mark, aligning with its 100-week moving average. This technical foundation, combined with macroeconomic tailwinds, positions December as a pivotal month for recovery. Institutional investors, who have been sidelined amid heightened volatility, may gradually increase exposure as clarity emerges from the Fed’s deliberations.

Global liquidity trends play a central role in this narrative. Coinbase’s proprietary M2 index, which tracks fiat currency supply across major economies, reversed its downward trajectory in early December. This shift indicates abundant capital available for investment, a condition that has previously catalyzed Bitcoin rallies. For instance, similar liquidity expansions in late 2020 preceded Bitcoin’s surge past $20,000. Analysts at the firm caution that while sentiment is still fear-dominated, with low ETF inflows reflecting caution, the confluence of events could tip the balance toward optimism.

Key Takeaways

• Global Liquidity Surge: Coinbase’s M2 index signals improving conditions, potentially fueling Bitcoin’s December rebound by enhancing overall market liquidity.
• Fed Rate Cut Probability: At 92%, expectations for a 25-basis-point cut on December 10 could lower yields and attract capital to crypto assets.
• Policy Outlook for 2026: Dovish signals, including discussions around figures like Kevin Hassett for Fed Chair, may sustain momentum into the new year—consider monitoring official announcements for strategic positioning.

Conclusion

In summary, the anticipated Bitcoin December rebound hinges on favorable Federal Reserve policy expectations, escalating global liquidity, and stabilizing market conditions as outlined by Coinbase Institutional. With Bitcoin holding firm near $80,000 and key events like the December 10 decision on the horizon, investors have opportunities to navigate this evolving landscape. As 2026 approaches, a more accommodative monetary environment could propel further gains—stay informed on central bank developments to capitalize on potential upside.