Bitcoin Price Trends and Investor Sentiment Suggest a Positive December

Bitcoin price action, investor sentiment point to bullish December

Key Takeaways:

Bitcoin may shift from its typical bearish trend in December as lower leverage and recovery of important price levels hint at improved stability.
The divergence between macroeconomic liquidity and Bitcoin's buying patterns is generally observed during the mid-stages of a bull market.
The structure of Bitcoin's market cycles is evolving, influenced by spot ETF inflows and global liquidity trends, disrupting traditional halving cycles.

Bitcoin has typically experienced a bearish period in December, but this trend could shift as lower leverage and the price's reclaiming of a critical technical level imply a more stable environment. Moreover, the divergence of macroeconomic liquidity and M2 velocity from Bitcoin's purchasing activity is similar to patterns observed during the middle of a bull market. Additionally, Bitcoin's market cycles are changing, with the effects of spot ETF inflows and various global liquidity dynamics disrupting the conventional halving-driven cycles.

Understanding Bitcoin's Seasonal Trends and Market Cycle Deviations

Bitcoin's returns in the fourth quarter historically show significant seasonality, with a weak December usually following a negative November. However, the market structure in 2025 has notably deviated from previous cycles.

Bitcoin attempts to consolidate above one-month rVWAP. Source: Cointelegraph/TradingView

Recently, Bitcoin has managed to rise above its monthly rolling volume-weighted average price (rVWAP). This indicates controlled distribution and a trend adoption at higher timeframes. Additionally, the drop in open interest from $94 billion to $60 billion has stabilized the market without derailing spot inflows, thereby creating a cleaner base for future growth.

From a technical perspective, liquidity zones shifted from November’s liquidation levels—around $1 billion near the $80,000 mark—to areas with inefficient clusters on the upside. Currently, $3 billion in cumulative short positions could be liquidated around the $96,000 level, and over $7 billion if Bitcoin reaches $100,000. These elements suggest that December may be underrated when compared to Bitcoin's historical performance patterns.

Bitcoin liquidity heatmap over three months. Source: Hyblock Capital

However, caution is advised as current momentum may be misleading. Cointelegraph reports that a taker buy/sell ratio of approximately 1.17 indicates urgent buying rather than substantial depth, often observed when positions are crowded. Analyst EndGame Macro noted that this reflects aggressive buying rather than sustainable accumulation.

At the same time, M2 velocity has plateaued, indicating that the broader economic foundation may be losing steam, even as risk assets continue to trend upwards. This situation portrays a late-market cycle phenomenon, where market volume increases but the economy appears sluggish.

Velocity of M2 Money Stock. Source: X

In this context, Bitcoin's efforts to achieve its first positive December following a negative November will be a test of whether investor positioning can outweigh broader economic fundamentals.

Moving Beyond Traditional Market Cycles

Analysts have increasingly recognized that Bitcoin's four-year market cycle does not fully capture the current market landscape. Analyst Michaël van de Poppe pointed out that while the four-year cycle is still relevant, it no longer aligns perfectly with temporal expectations.

The emergence of spot Bitcoin ETF inflows has introduced a continuous demand, enhancing price discovery and raising Bitcoin's support level compared to earlier cycles. Van de Poppe likens this cycle to an extended liquidity phase reminiscent of mid-2016 or late 2019, where risk assets improved despite inconsistent macroeconomic indicators.

Moreover, supportive metrics such as the CNY/USD correlation with ETH/BTC tend to rise early in expansionary periods, as opposed to near the peaks of market cycles.

CNY/USD and ETH/BTC directional bias. Source: X

Business-cycle indicators, including the Purchasing Managers’ Index (PMI), are gradually improving alongside gold's strength, signifying a recovery in risk appetite from low levels rather than a decline. Van de Poppe concluded that in this context, Bitcoin's December outlook relies less on repeating historical trends and more on the influence of new structural elements like spot ETF inflows, liquidity shifts, and changing macroeconomic correlations, which could overshadow older halving cycles.

Related: Bitcoin appears increasingly similar to its 2022 patterns: Can BTC price avoid dropping to $68K?