Bitcoin’s ‘Santa’ rally may be ignited by macroeconomic tailwinds, including the Federal Reserve’s incoming interest rate decision, but fearful investor sentiment may take another hit by any hawkish remarks from central bank officials.
Coinbase Institutional says that improving liquidity and rising chances of an interest rate reduction by the Federal Reserve may be catalysts for a crypto market recovery during December.
“We think crypto could be poised for a December recovery as liquidity improves, Fed cut odds jump to 92% (as of Dec 4), and macro tailwinds build,” wrote Coinbase appears in a research report published on Friday.
Coinbase predicts October. “weakness” Crypto market to be booming ahead of A “December reversal,” Based on the custom-made global M2 money stock index which measures total fiat currency outstanding.
Still, market sentiment remains “dominated” Institutional and retail capital remains untouched by the fear of a collapse in financial markets “hesitant to step in,” Coinbase has said that this will leave the market in limbo until there is a rebound in ETF inflows.
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Fed rate cuts are crucial for Bitcoin in 2026
The market analysts have warned that the possibility of an increase in a “Santa rally” following the Fed’s rate cut — a market pattern in which assets see short-term gains around Christmas.
Bitcoin’s (BTCNic Puckrin (co-founder and crypto analyst of Coin Bureau’s educational platform) believes the Federal Reserve chair Jerome Powell may have a greater impact on prospects in the first quarter 2026. He said to Cointelegraph that:
“If the Fed cuts rates on December 10th, along with ending QT, there’s little standing in the way of a Santa rally for Bitcoin – bar any major geopolitical bombshell.”
“However, investors will scrutinise Jerome Powell’s every word during the press conference to get a glimpse into 2026 monetary policy, and any hawkishness could put a lid on the rally,” “He said”
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Others attributed Bitcoin’s sell pressure in November to Powell’s previous hawkish statements, but are expecting a recovery by December. Chris Kim is the co-founder of Axis and CEO, a quantitative onchain trading fund that manages $100 million live capital.
“Overall, we’re leaning toward a recovery,” The word “as” is used to describe the. “biggest driver right now is macro,” Kim added:
“From a technical perspective, the market has already retested the ~$80k region and the 100-week average. We’re also seeing incremental positives such as Vanguard allowing ETF trading.”
National Economic Council director Kevin Hassett In early 2026, the Federal Reserve will name a new chairperson. “notably more dovish” Kim, in his opinion, has a policy.
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Source: cointelegraph.com
