Bitcoin Poised for Year‑End Surge as Leverage Drops, Says Coinbase
Coinbase Institutional suggests that Bitcoin could be heading for a strong finish to the year as speculative leverage in the market has decreased significantly.
Systemic Leverage Decline
The firm’s systemic leverage ratio, which measures speculative positioning, has stabilized at 4%‑5% of the total market capitalization, down from 10% earlier this year. This reduction has led to a healthier market structure, with less vulnerability to sharp declines as we head into the end of the year.
Recent Price Action
Bitcoin experienced its second‑worst November performance in history, dropping 17.7%. However, December has started on a more positive note, with Bitcoin up 2.3% so far this month. The cryptocurrency briefly reached a three‑week high of $94,500 but later pulled back to $92,400 during the Wednesday morning trading session in Asia.
Analyst Perspectives
The Federal Reserve is expected to announce a rate cut later today, but analysts say this has already been factored into the market. Spencer Hallarn, Global Head of OTC at GSR, shares Coinbase’s optimism, stating that the market has shaken out many bulls and built a base of skepticism. He also notes that perpetual funding rates are low or negative, indicating minimal leverage in the system, which could set the stage for a year‑end rally.
Michaël van de Poppe, founder of MN Fund, believes that Bitcoin is currently undervalued compared to the Nasdaq and high‑beta tech stocks, presenting a buying opportunity. He suggests that Bitcoin could see a gradual increase to levels between $110,000 and $115,000 in the near future, reversing recent losses as the market correction was somewhat questionable.
Outlook
In summary, the reduction in systemic leverage, combined with positive market signals and historical trends, suggests that Bitcoin could be poised for a strong performance as the year comes to a close.
