After two bruising months that rattled confidence and erased gains, fresh analysis from Coinbase Institutional argues that the digital asset market may be shifting from stress to recovery — and could be setting up for a strong end to the year.
Instead of describing October and November as failures, Coinbase frames them as a purge. Capital flowed out of ETFs, traders reduced exposure, and leveraged bets shrank — but analysts say this process removed the excess heat that had built up earlier in the cycle.
Key Takeaways
Coinbase Institutional says recent declines cleansed excess speculation rather than broke the market.
Leverage and open interest have dropped sharply, leaving a healthier setup for upside.
Analysts believe December could deliver a rebound if macro conditions remain supportive.
Their internal leverage indicator supports that argument: speculative positioning dropped from double-digit levels to roughly 4% today, a level they call “much healthier.”
Institutions Didn’t Exit — They Hit Pause
Coinbase notes that billions leaving Bitcoin and Ethereum ETFs shouldn’t be mistaken for abandonment. Instead, it represented risk compression: funds reduced positions and waited. Open interest in futures saw a similar pattern — a retreat that says traders closed leverage rather than fled the asset class.
That reset, according to Coinbase, is what places the market in a more constructive posture now.
Seasonality Has Been Disrupted — but Maybe in a Good Way
Historically, December tends to reward investors during post-halving cycles, with average gains near 25%. Ironically, 2025 flipped the script — the months that usually surge became the worst since 2018.
Coinbase argues that this inversion strengthens the probability of a rebound. Expectations have been flushed, leverage is low, and positioning is cleaner than it has been in months — all ingredients for upward trending markets if macro pressures don’t interfere.
Analysts Hint at a Turning Point
The firm summarized December potential in one punchy thought: a painful November may pave the way for an unexpectedly strong finish.
Lower leverage means sell-offs should hurt less and upside may develop with less friction. Whether that translates to Bitcoin aiming back toward the $100,000 narrative remains to be seen, but Coinbase’s tone implies that the building blocks for another rally are falling into place.
In short, rather than breaking the bull cycle, the last two months may have reset it — setting the stage for what analysts think could be a surprisingly resilient year-end phase for crypto markets.
