Analysts at Coinbase Institutional have outlined a positive scenario for the digital asset industry in December. They believe that the November correction has set the stage for a market recovery by the year’s end.
A rocky November may have set the stage for a December to remember.
Positioning reset in November:
• Open interest across BTC/ETH/SOL perps was down 16% MoM
• U.S. spot ETFs saw $3.5B $BTC and $1.4B $ETH in outflows
• BTC perp funding rates dropped 2σ below their 90-day… pic.twitter.com/qApZFuMF2X— Coinbase Institutional 🛡️ (@CoinbaseInsto) December 9, 2025
Experts noted a significant “reset” in trader positioning last month. The total open interest in perpetual futures for Bitcoin, Ethereum, and Solana fell by 16% compared to October.
U.S. spot ETFs experienced capital outflows of $3.5 billion and $1.4 billion. Simultaneously, Bitcoin futures funding rates dropped significantly below the 90-day average.
Coinbase expressed cautious optimism, explaining the dynamics as a “washout of speculative excess.” The systemic leverage ratio stabilized at 4-5% of total market capitalization, down from 10% in the summer.
The reduction in leverage indicates an improvement in market structure, reducing asset vulnerability to sharp declines before the year’s trading closes, experts concluded.
Signs of Capitulation and Potential Market Reversal
The profit-to-loss ratio has reached levels that historically signal the exhaustion of a downward trend, noted CryptoQuant analyst Darkfost.
📊 The Profit/Loss ratio has just reached a very interesting level.
⚠️ Before going any further, it’s important to clarify that this indicator only works reliably during bull markets. For now, I still believe we are in a mid-cycle correction, so I’m sharing this signal with… pic.twitter.com/rS8BzIHOMz
— Darkfost (@Darkfost_Coc) December 9, 2025
The seven-day moving average fell below one, reaching 0.7. This indicates that in recent weeks, realized losses have exceeded recorded profits. The current value is significantly below the annual average of 7.6.
The expert noted that such dynamics were observed during past corrections and indicate investor capitulation. Often, the peak of sell-offs forms the best opportunities to enter the market before a trend change.
Darkfost urged caution in using the signal, emphasizing that the indicator works reliably only in bull markets. According to the analyst, Bitcoin is currently in a “mid-cycle correction.”
Buy Signal
According to Darkfost, the Hash Ribbons indicator has signaled a buy for the leading cryptocurrency. The expert described it as “strong and relevant,” but cautioned traders against rushing in.
He emphasized that the metric indicates a favorable moment for long-term accumulation of the asset, rather than an immediate entry into a position.
💥 The Hash Ribbons flash a new buy signal.
This doesn’t mean you have to rush in, but it’s a strong and relevant signal worth sharing.
👉 Historically, these periods of mining stress have been profitable for Bitcoin investors, with one exception during the 2021 mining ban in… pic.twitter.com/YkXSiK7ykq
— Darkfost (@Darkfost_Coc) December 9, 2025
Historically, periods of “mining stress” have been profitable for investors, with the sole exception being 2021, when China imposed a complete ban on cryptocurrency mining.
The Hash Ribbons work by comparing the 30- and 60-day moving averages of hashrate. A drop in the short-term line below the long-term one signals capitulation: due to reduced profitability, market participants are forced to shut down inefficient equipment.
In the short term, this pressures the price as companies actively sell off coin reserves to cover operating expenses. However, this forced liquidation often forms a local bottom, creating opportunities for advantageous purchases, the analyst explained.
Earlier, researchers at London Crypto Club predicted a sharp rise in Bitcoin, driven by the upcoming Federal Reserve meeting.