What’s Happening
Price Action
This past week has seen BTC rally up from the lows around $80,000. Currently up at $91,244 it has gained +5.72% over the past week.
Figure 1: BTC price has rebounded this past week.
There is still a lot of work for Bitcoin to do though, to recover and climb back up to the highs we saw in recent months. Verses 3 months ago, BTC remains down -20.67%.
Figure 2: BTC past 3 months price activity.
The first major target to conquer remains the 1-year moving average, which is around the psychological resistance of $100,000.
Figure 3: 1-year moving average target.
That is a key level for BTC because it has always served as a line in the sand between bull and bear markets.
The Big Story: Coinbase Forecasts A December Rally
According to a recent Coinbase Institutional report, Bitcoin may be entering one of the most constructive phases it has seen in months. Coinbase Institutional is highlighting a combination of improving macro conditions and a meaningful shift in long-term holder behaviour that together could set the stage for a stronger December.
On the macro side, Coinbase Institutional points to a clear uptick in global liquidity, led by rising M2 money supply and loosening financial conditions in several major economies.
Figure 4: Global M2 Liquidity continues to rise.
Markets are also now pricing in a high probability that the Federal Reserve will cut rates at the December 10 meeting. If that happens, it would represent a decisive pivot from the tightening narrative that has weighed on risk assets for much of the year.
Figure 5: Fed Interest Rate over the past 7 years.
According to Coinbase, this type of backdrop has historically been fertile ground for Bitcoin recoveries, raising the possibility of a “Santa rally” into year-end.
Macro conditions are only part of the story. One of the more notable developments is the cooling of long-term seller activity. After months of steady distribution from seasoned holders, which contributed to persistent overhead supply, Coinbase notes that this selling pressure has now eased significantly.
Long-term holders are no longer offloading coins at the same pace, which reduces a major drag on price and allows spot demand to have more influence.
This is evident in the recent uptick in the 5-year HODL wave, which shows that the percentage of bitcoin held for more than 5 years has started to increase again.
Figure 6: +5yr HODL wave decline has recently stopped.
In previous cycles, similar slowdowns in long-term distribution have coincided with early-stage recoveries.
There are still potential obstacles. ETF flows remain mixed, investor sentiment is cautious, and any unexpected hawkish tone from the Federal Reserve could quickly weaken momentum. Even so, the combination of improving liquidity, a possible policy shift, and reduced structural selling suggests that Bitcoin enters December with a stronger foundation than it has had in several months.
Figure 7: Bitcoin monthly price performance.
If these trends hold, a renewed upward phase may not be far off, which could lead to a brighter finish to the year for BTC price performance.
The Bitcoin Magazine Pro Team.