Key takeaways
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Coinbase claims that institutional speculation has calmed and is now stabilized.
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Coinbase’s report hinted at a potential bull rally in December, after two months of bearish bloodbath.
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December has historically been a bull month, delivering a 25% return during a bull market.
Coinbase believes that the crypto market is preparing for a reset after two months of strong bearish pressure.
Coinbase, in its latest article, claims that institutional speculation has increased from 10% in November to almost 4% today.
In an article this week, Coinbase highlighted a sharp decline in its “systemic leverage ratio,” a metric it uses to track speculative positioning in the market.
According to Coinbase, this ratio has increased from around 10% this summer to around 4-5% today, a level the company considers both stable and sustainable.
Simply put, less leverage means fewer hidden landmines.
It also helps explain why the sell-offs of the past two months – triggered by cascading liquidations – have started to fade.
The exchange highlighted several factors behind November’s turmoil:
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BTC/ETH/SOL perpetual futures open interest fell 16% month-over-month.
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US spot ETFs saw $3.5 billion in outflows from Bitcoin and $1.4 billion in redemptions from Ethereum.
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BTC perpetual funding rates fell two standard deviations below their 90-day average before recovering.
For Coinbase, these were not signs of collapse, but symptoms of a market purging excess debt.
A decline in the systemic leverage ratio is significant because institutions generate much of the volume in structured derivatives – through OTC desks, ETFs, swaps and prime brokerage.
Coinbase data suggests:
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Hedge funds and family offices reduced their exposure following ETF outflows.
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The ETFs’ $4.9 billion loss reflects portfolio rebalancing, not an institutional exit.
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The contraction in open interest rates of options and perpetual futures has hit institutional desks hardest, aligning with CFTC data showing managed funds returning net-short BTC futures for the first time since early 2025.
In short, institutions put the brakes on, but did not abandon the market.
Historically, December has generated strong returns in post-halving bull years, with an average increase of 25% for Bitcoin.
However, 2025 repeatedly defied seasonality: October and November, typically strong months, turned out to be two of the worst since 2018.
Coinbase nevertheless says that a cleaner market structure could pave the way for a recovery at the end of the year, if macroeconomic conditions cooperate.
