Key Insights:
- The crypto market traded downwards over the past few weeks since the start of November but there are signs of a December recovery.
- Coinbase released a research report saying December opened with a sharp rise in global liquidity. The firm noted that expectations for a Federal Reserve rate cut hit 92% by December 4.
- There was a notable increase in USDT deposits. Such an increase in stablecoin inflows usually means traders are getting ready to act by either buying dips or repositioning.
The crypto market traded downwards over the past few weeks since the start of November. However, various fundamental, policy and on-chain metrics are pointing towards a recovery in the crypto prices by the end of December.
Here are the top four reasons why the crypto market could pump soon.
Coinbase Sees Liquidity Jump and Possible Crypto Market Rebound
Coinbase released a research report saying December opened with a sharp rise in global liquidity. The firm noted that expectations for a Federal Reserve rate cut hit 92% by December 4. Analysts said this could help the crypto market find support.
The report highlighted Coinbase’s global M2 money supply index, which shows a steady recovery heading into late 2025. The team added that a weaker dollar may give a fresh momentum to the crypto prices.
Earlier in the year, Coinbase warned that October would spark a positioning reset and that November would likely stay soft.
Still, the exchange now believes a real reversal may finally be underway in December with the supposed AI bubble not bursting and the rising attraction of USD trades.
Bitcoin Faces Liquidity Pressure Amid Federal Reserve Policy
In its latest outlook, Coinbase Institutional noted that the Fed has returned to the bond market. This suggests the final phase of quantitative tightening may be near.
The move often eases liquidity pressure. Analysts say this can support crypto market and assets like Bitcoin. In November, Bitcoin dropped more than three standard deviations below its 90-day trend, while U.S. equities stayed closer to their normal range.
The report also highlighted that long-term holders engaged in a rare period of coin distribution, and crypto prices traded below net asset value for the first time this year. These signs suggest a potential recovery in December.
Analyst Ted Pillows had warned the U.S. 10-year yield may hit its biggest weekly gain since June 2025. He said, “Despite the Fed cutting rates, the 10-year yield remains above 4%, which is not a good sign for risk-on assets.”
Crypto Market: USDT Deposits Soar as Traders Brace for Volatility
Binance Exchange recorded 946,000 USDT deposits in the past seven days. OKX followed with 841,000, while Bybit saw 225,000.
An Increase in stablecoin inflows usually means crypto market traders are getting ready to act. They could be preparing to buy dips or reposition quickly during market swings.
CryptoQuant’s crypto market data shows USDt flows across exchanges on the Tron network. With whale selling and high BTC inflows, experts say this surge points to reactive trading, not long-term accumulation.
In uncertain times, stablecoin inflows often lead to higher volatility and may cause short-term price swings.
Stablecoin Strength Fades as Altcoins Hold Firm
Data from Altcoin Vector shows a gap between stablecoin dominance and altcoin performance. Historically, peaks in USDT dominance often came just before money moved back into higher-risk assets like the crypto market.
In recent weeks, stablecoins have started to weaken. Altcoins, however, have stayed steady. Analysts say this may signal that traders are getting ready to return once Bitcoin stabilizes.
If this rotation continues, altcoins could rally quickly. Past patterns suggest that liquidity moving toward risk assets often triggers sharp rallies in the crypto prices.
Source: https://www.thecoinrepublic.com/2025/12/08/top-4-reasons-why-crypto-market-will-pump-soon/
