Cryptocurrency market shows signs of potential recovery, says Institutional Coinbasedriven by improving liquidity and the strong possibility of a rate cut by the Federal Reserve.
Reasons to be optimistic
This potential rebound is attributed to improving liquidity conditions and a significant increase in the probability of a Federal Reserve rate cut, which was 86.2%, according to the CME FedWatch tool on Sunday.
Bitcoin (CRYPTO:BTC) was down 0.5% over the past 24 hours, hovering around $89,200 at the time of writing. Ethereum (CRYPTO: ETH) was down 0.03%, hovering around $3,030.
In an article on the social media platform XCoinbase Institutional highlights several factors contributing to this optimistic outlook.
Liquidity in the market is showing signs of recovery, which could provide the support needed for a market recovery, the company said. Additionally, the long-awaited “AI bubble” has yet to burst, suggesting that there is still potential for growth in this sector.
See also: Michael Saylor, Nayib Bukele and Tom Lee stand firm amid crypto sell-off – Here are the entities buying Bitcoin and Ethereum plunges aggressively
Additionally, short trades on the US dollar are currently seen as attractive, adding another layer of positivity to market sentiment, the firm noted.
New momentum on the cards
In October, Coinbase Institutional hinted at a potential shift in market positioning, using its custom M2 index to predict November weakness and a possible reversal in December.
This analysis suggests that the crypto market could be on the starting line for new momentum, as macroeconomic winds continue to strengthen, potentially paving the way for a significant recovery.
Bitcoin Market Structure
The potential recovery in the cryptocurrency market comes at a time when the Bitcoin market structure echoes that of early 2022, marked by weakening demand and increased on-chain stress. Despite this, Max Keizer advised investors to focus on Bitcoin’s long-term upward trajectory, comparing it to an eel whose head remains stable while its tail wobbles.
Alice Liuhead of research at CoinMarketCap, suggests that the next real Bitcoin expansion cycle may not arrive until 2026, as the market is currently in a phase of high fear and volatility.
However, the Bitcoin maximalist Max Keiser advised his followers to ignore the cryptocurrency’s volatile declines and focus on its long-term upward trajectory.
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Disclaimer: This content was partially produced using AI tools and was reviewed and published by Benzinga editors.
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