by Coinstrooper Crypto Articles
Quick Take
  • Bitcoin may be approaching a decisive December as liquidity conditions tighten and on-chain metrics shift.
  • Recent on-chain trends and exchange-collateral data point to similar pressure building beneath the surface.
  • Lee told CNBC that the October event severely damaged market-maker balance sheets.
  • He described these firms as the “central banks” of crypto, responsible for depth, spreads, and inventory.

What Happened

Recent on-chain trends and exchange-collateral data point to similar pressure building beneath the surface.

Order-book depth fell sharply across major exchanges, creating air pockets that amplified downside moves. Under such conditions, Bitcoin and Ethereum tend to react earlier to macro stress than equities.

“Bitcoin makes its best moves in 10 days every year, I think some of those days are still gonna happen before year end,” said Tom Lee.

Market Context

Bitcoin may be approaching a decisive December as liquidity conditions tighten and on-chain metrics shift. BitMine Chairman Tom Lee says the market has been “limping” since the October 10 liquidation shock, but argues the setup now supports a major move before year-end.

Liquidity Damage Still Defines the Market

Lee told CNBC that the October event severely damaged market-maker balance sheets.

He described these firms as the “central banks” of crypto, responsible for depth, spreads, and inventory. When their balance sheets shrink, liquidity contracts for weeks.

This matches market performance since early October. Bitcoin has dropped almost 30% from its $126,000 peak.

Meanwhile, November has delivered one of the worst monthly performances for both price and ETF flows in years.

Market makers withdrew risk capital after the liquidation wave erased roughly $19 billion of leveraged positions.

Bitcoin’s 90-day Spot Taker CVD has shifted from persistent sell dominance to a neutral stance. The indicator tracks aggressive market orders on spot exchanges.

However, it does not show strong buyer dominance. Instead, the market has entered a balanced phase typical of late-cycle bear markets.

Price remains well below October levels, but the absence of persistent taker-sell pressure signals improved stability.

The shift aligns with the broader leverage reset seen in futures markets, where funding rates have moved near zero.

This behavior reduces immediate selling pressure. It also confirms that long-term holders continue to treat Bitcoin as their primary liquidity source.

Combined with thin order books, any forced selling could produce outsized volatility. This dynamic reflects late-bear fragility rather than early-bull strength.

A Market Caught Between Exhaustion and Low Liquidity

Why It Matters

Despite this damage, Lee expects a strong December rally, citing a potential dovish shift from the Federal Reserve.

The recent move to neutral marks a break in that pattern. It suggests the aggressive selling phase has exhausted.

Yet it adds another layer of vulnerability. If Bitcoin drops further, collateralized positions face liquidation risk.

Details

On-Chain Metrics Show Sellers Losing Control

Red bars dominated from early September through mid-November, showing sustained taker-sell pressure.

Borrowing Trends Point to Strong Hands, but Fragile Leverage

CryptoQuant data shows Nexo users prefer borrowing against Bitcoin rather than selling it. BTC accounts for 53% to 57% of all collateral on the platform. That range has held for months despite the drawdown.