Bitcoin ($BTC) December Christmas Market is about to begin...... A structural rise after leverage liquidation can be expected

Bitcoin (BTC) is signaling a December bull run. Coinbase Institutional diagnosed that the over-leverage of the entire system was liquidated last month, and the market structure became healthier. Accordingly, some predict that the “Christmas rally” that is likely to continue until the end of the year will continue.

Coinbase said in its latest report on the 4th (local time) that the “systematic leverage ratio”, an indicator that measures leverage ratios, has stabilized at the level of 4-5% of the total market capitalization. This is almost half of the 10% level in the summer, indicating that a large-scale liquidation of speculative positions has taken place. “Reduced leverage means a healthier market structure and a reduced risk of a year-end crash,” the report emphasized. "

In fact, Bitcoin entered December with a rebound after the second-worst November in history (-17.7%). The cumulative yield so far this month is about 2.3%, and although it has not yet reached the record of 47% increase in December 2020, the market sentiment is changing. On the 3rd, the price of Bitcoin soared to $94,500 (about 138.73 million won), then adjusted slightly, and traded at $92,400 (about 135.71 million won) in the Asian market on the morning of the 4th. Expectations of a cut in the Federal Reserve’s benchmark interest rate also provide support for higher prices.

Spencer Hallarn, global head of GSR’s OTC division, analyzed: "Excessive optimism has subsided, forming a new basis based on a cautious view. He commented: “Judging from the extremely low or even negative funding rate of perpetual futures, the leverage in the system has been greatly reduced”, “This is a pattern that can be expected to rise at Christmas.” "

Meanwhile, some market analysts point out that Bitcoin is undervalued relative to the Nasdaq, a technology stock index. Michael van de Poppe, founder of MN Fund, mentioned, “The Nasdaq, which has a strong correlation in the past, has shown a recovery trend, but Bitcoin has not been able to keep up,” mentioning the potential for future trends to fill the gap. “By early next year, it is likely to gradually recover to the level of $110,000-115,000 (about 161.81 million to 169.19 million won),” he predicted. "

On the other hand, December is usually a friendly time for Bitcoin. Generally speaking, volatility will increase at the end of the year due to the combined effect of low-priced buying orders and selling orders for tax reduction purposes, but this year, thanks to the improvement of structural physique, the weight of the possibility of a rebound is increasing.

Article Summary by TokenPost.ai

🔎 Market interpretation

Excessive leverage is liquidated, and the cryptocurrency market structure stabilizes. This has created favorable conditions for the price to rise at the end of the year and is shaping the upward momentum for Bitcoin.

💡 Strategic Points

The stability of leverage indicators is a positive sign for medium and long-term investors. Depending on whether interest rate cuts are announced in the future and whether the correlation with the Nasdaq is restored, it is also worth considering additional upside potential.

📘 Explanation of terms

System leverage ratio: An indicator that shows the total market capitalization compared to the leverage size. The lower the value, the less speculative the market shares, representing a stable trend.

Christmas rally: The phenomenon of seasonal increases in stock prices or asset prices during the year-end and New Year holidays

TP AI Considerations

This article uses a TokenPost.ai-based language model for article summarization. The main content of the text may be omitted or inconsistent with the facts.