Bitcoin (BTC) has entered November facing a statistical challenge it hasn’t overcome in the past: Whenever the month ended negatively, BTC found it difficult to gain bullish momentum in December. However, the current situation appears distinctly different, with factors like momentum, liquidity shifts, and cycle variations countering what has traditionally been a consistently bearish seasonal pattern.
Key Insights:
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Bitcoin’s bearish tendencies in December might change due to lowered leverage and a price recovery at a significant technical level, indicating a potentially more stable environment.
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There seems to be a divergence between macroeconomic liquidity and M2 velocity from Bitcoin’s purchasing patterns, typically observable in the middle phases of a bull market.
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The cycle structure of Bitcoin has evolved, with spot ETF inflows and global liquidity changes impacting the conventional halving cycles.
Breaking Seasonal Patterns and Cycle Deviations for BTC
Historically, Bitcoin’s Q4 returns have shown strong seasonality, often resulting in a weak December following a negative November. Yet, the current market structure seems to diverge sharply from past cycles.
BTC’s price has surpassed its monthly rolling volume-weighted average price (rVWAP), indicating steady distribution and adoption of long-term trends. A notable drop in open interest from $94 billion to $60 billion has helped stabilize the market without hindering spot inflows, setting a clean foundation for potential continuation.
From a technical perspective, significant liquidity clusters have shifted from November’s downside, totaling approximately $1 billion near $80,000, toward upside clusters. Currently, $3 billion in short positions are at risk of liquidation at $96,000, with more than $7 billion becoming susceptible if BTC reaches $100,000.
These aspects suggest that December could be underpriced relative to Bitcoin’s historical performance probability curve. Despite this, Cointelegraph warns that the current momentum might mislead investors. Indicators like the taker buy/sell ratio near 1.17 signify urgency rather than depth, often appearing when positions are overcrowded.
At the same time, M2 velocity has plateaued, suggesting that the broader economy might be losing momentum even as risk assets reach new heights—characteristic of late market-cycle stages where market activity intensifies while the economic backdrop remains subdued. Thus, Bitcoin’s effort to achieve its first positive December after a negative November could ultimately test whether positioning can outstrips broader market dynamics.
