December Inflection: Breadth Thrusts, Liquidity Sparks, and the Case for an Extended Crypto Cycle
As we move into December, the market feels like it’s entering another one of those quiet but important turning points. Equity breadth just posted one of the strongest thrusts we’ve seen since the last major bull run, the Fed slipped a meaningful liquidity injection into the system through the repo market, and Bitcoin is stacking bottoming signals across technical, on-chain, and liquidity frameworks all at once. At the same time, US PMI leading indicators continue to hold firm—showing the kind of mid-cycle expansion setup that historically precedes significant upside, not a cycle peak. When you put all of this together, the message is pretty straightforward: we’re in a December inflection window, and the probability of an extended crypto cycle is strengthening, not fading.
1. Macro Liquidity Shifts & Equity Breadth Signals
Liquidity conditions are quietly shifting beneath the surface, with equities flashing powerful breadth thrusts and the Fed injecting fresh liquidity reminiscent of pre-QE periods.
S&P 500 (McClellan Oscillator)
Insight: The S&P 500’s McClellan Oscillator cycled from -55 to +68 in just one week.
Historical pattern: 1 year later → 100% positive, +17% average return.
Source:
S&P 500 (December Seasonality)
Insight: December 3 tends to be the seasonal low for December, with the next closest low often occurring around December 15.
Source:
S&P 500 (Zweig Breadth Thrust Conditions)
Insight: A full Zweig Breadth Thrust did not trigger, but the underlying breadth criteria still show strong internal market strength.
Forward returns: 1 year later → 100% positive, +31% average return.
Source:
Nasdaq (8-Day Winning Streak)
Insight: The Nasdaq closed higher for 8 consecutive days, a rare but historically constructive signal.
Forward returns: 1 year later → 91% positive, +18% average return.
Source:
Nasdaq (% of Stocks Above 10-Day MA)
Insight: The percentage of Nasdaq stocks above their 10-day moving average surged from 20% to over 75% within 10 days – a breadth thrust–like event.
Forward returns: 1 year later → roughly 90% positive with about 25% average return.
Source:
https://twitter.com/i/status/1996559133261299864
XLK (Tech ETF 9-Day Win Streak)
Insight: XLK, the tech sector ETF, has closed higher for 9 days in a row, underscoring persistent leadership from large-cap tech.
Forward returns: 1 year later → 93% positive, +16% average return.
Source:
Repo Market (Fed Liquidity Injection)
Insight: The Federal Reserve injected $13.5B into the banking system through overnight repos – the second-largest spike since COVID.
Interpretation: Conditions echo late 2019, when repo stress preceded the restart of QE, suggesting QE could arrive sooner than many expect.
Source:
https://twitter.com/BullTheoryio/status/1995801417370714323
Japan 20-Year Yield (Macro Risk Trigger)
Insight: Japan’s 20-year yield continues to grind higher, risking another yen carry trade unwind similar to August 2024.
Implication: A volatility spike from JPY stress often forces additional liquidity injections and easing from global central banks to avert broader market dislocation.
Source:
Summary
Equities are printing some of the strongest breadth thrust conditions since the last major bull runs, with McClellan, Zweig-style signals, Nasdaq internals, and sector strength in XLK all pointing to robust forward returns. At the same time, the Fed has quietly restarted meaningful liquidity injections via the repo market while rising Japanese yields threaten another policy response cycle. Together, these dynamics create a macro backdrop that supports risk assets—and sets the stage for a potential crypto bottom and recovery.
2. Bitcoin Technical Levels & On-Chain Bottoming Signals
Bitcoin is interacting with key support levels while some of the strongest bottom-probability indicators in years continue to fire.
Bitcoin (True Market Mean Support)
Insight: Bitcoin has bounced off the True Market Mean around the $82,000 region.
Next key levels: A sustained move back above $95K and the Short-Term Holder (STH) Cost Basis (~$104K) would further confirm a bottom and shift the structure back in favor of the bulls.
Source:
https://twitter.com/FrankAFetter/status/1996200931449524231
Bitcoin (Death Cross Bottom Model)
Insight: A Bitcoin “death cross” triggered on November 15.
Track record: This signal has confirmed 11 of 12 bottoms within 10 days over the last 14 years, heavily skewing probabilities toward the bottom already being in.
Source:
Bitcoin (USDT Dominance Rejection)
Insight: Mags overlays Bitcoin with USDT dominance. Historically, when USDT dominance rejects from the 6–7% band and turns lower, it coincides with a local low in Bitcoin.
Current signal: USDT dominance is once again rejecting from the upper band, hinting that a BTC low may be forming or already in.
Source:
https://twitter.com/thescalpingpro/status/1995899563451056255
Bitcoin (Binance Stablecoin Reserve Ratio)
Insight: Crypto Seth shows that the Bitcoin/Stablecoin reserve ratio on Binance has hit its lowest reading in the data set.
Context: These lows are comparable to major inflection zones in 2018, mid-2022, early-2023, and April 2025 – all key bottoming periods in the current and previous cycles.
Source:
https://twitter.com/seth_fin/status/1995799995119714417
Bitcoin (Velocity RSI – 3D)
Insight: On-Chain Mind’s 3-day Bitcoin Velocity RSI has just printed its lowest reading since the bottoms of the last three bear markets.
Signal: This is a classic capitulation-style signal that has historically marked or closely preceded major market lows.
Source:
https://twitter.com/OnChainMind/status/1995761194800382437
Bitcoin (Real Buying vs. Selling Pressure)
Insight: Another On-Chain Mind chart compares real buying and selling pressure to the strength of price movement.
Current reading: The buying pressure metric is now at its highest level since the August 2024 and April 2025 bottoms, both of which preceded significant upside moves.
Source:
https://twitter.com/OnChainMind/status/1995394370103578945
Bitcoin (Sharpe Ratio – Bottom Proximity)
Insight: Quinten’s Sharpe Ratio analysis suggests Bitcoin is structurally closer to a bottom than a top, based on how risk-adjusted returns behave around major cycle turning points.
Source:
https://twitter.com/i/status/1996208063855182172
Bitcoin (STH Supply in Profit/Loss Ratio)
Insight: Frank also highlights Short-Term Holder supply in profit vs loss.
Pattern: The current structure closely mirrors April 2025, which marked a confirmed local bottom before the next leg higher.
Source:
https://twitter.com/i/status/1996573317361234397
Bitcoin (Monthly Open Pattern)
Insight: Daan Crypto Trades notes that the first move from the monthly open often sets the monthly high or low within roughly 12 days.
Implication: Early December price action may already be defining the range extremes for the remainder of the month.
Source:
https://twitter.com/DaanCrypto/status/1995599032152899946
Bitcoin (Global Liquidity Oscillator Discount)
Insight: Julius’s Bitcoin vs Global Liquidity Oscillator model shows that current BTC prices are below 97% of historical values implied by global liquidity.
Interpretation: On this framework, Bitcoin is trading at a historically rare “major discount” relative to global liquidity conditions.
Source:
https://twitter.com/jv_finance/status/1995612398376362354
Summary
Multiple independent Bitcoin indicators—technical, on-chain, and liquidity-based—are all flashing bottom-like conditions. From the Death Cross bottom model and True Market Mean bounce to Velocity RSI, Binance reserve ratios, Sharpe behavior, and global liquidity discounts, the weight of the evidence points to a high-probability bottoming process rather than a topping one.
3. US PMI Leading Indicators
Forward-looking macro and cross-market indicators from the Altcoin Screener Framework continue to signal that the broader cycle backdrop remains supportive. These models help determine where we are in the business cycle, which historically aligns closely with altcoin outperformance phases.
US PMI (vs Global M2 YoY % Change)
Insight: The relationship between US PMI and Global M2 growth remains elevated. Historically, when Global M2 accelerates ahead of PMI, it signals early-phase economic expansion—a period where risk assets, including crypto, tend to outperform.
Implication: With rate cuts and liquidity expansion policies expected in the coming months, this indicator still suggests more upside ahead for PMI, which supports continued strength across crypto markets.
US PMI (vs US Citi Earnings Revisions Index)
Insight: The latest US Citi Earnings Revisions Index remains elevated, indicating analysts are still revising earnings upward.
Implication: This tends to precede and support future PMI strength, reinforcing the idea that economic momentum has not yet peaked—another constructive signal for risk assets and altcoins.
US PMI (vs New Orders)
Insight: The New Orders component — historically a 1-month leading indicator for US Manufacturing PMI — came in slightly lower on the latest print. This softening mirrors the mild dip in the headline PMI but does not show any meaningful breakdown in forward demand.
Context: Across cycles, New Orders is one of the earliest indicators to turn before broader PMI trends shift. A modest pullback while still hovering near mid-cycle levels suggests normal cooling rather than contraction.
Implication for the cycle: A slight decline in New Orders typically aligns with a temporary pause in manufacturing momentum — not a reversal. Combined with Global M2 and Citi Earnings Revisions, this reinforces a backdrop consistent with continuing expansion rather than late-cycle deterioration.
Implication for crypto: Risk assets, including altcoins, tend to perform strongest during PMI recoveries following mild dips in New Orders. The current setup still aligns with the view that PMI is more likely to re-accelerate into 2026, supporting the broader altcoin trend.
Summary
The US PMI leading indicators continue to align with a mid-cycle expansion setup. Global liquidity conditions, and earnings trends, all point toward further upside in US PMI—historically a strong tailwind for Bitcoin and especially altcoins. These signals strengthen the case for a continuation of the broader crypto uptrend.
4. Altcoins, Market Structure, and Liquidity Positioning
Altcoins are approaching major inflection points—with compression, market structure, and relative performance all hinting at a major move.
Altcoins ($OTHERS Head & Shoulders)
Insight: SuperBro’s $OTHERS (mid and small cap altcoins) weekly chart shows a prominent Head & Shoulders pattern.
Context: This is described as a “do or die” moment for altcoins: a failed breakdown or reclaim of the neckline could launch a new upside leg, while a clean breakdown would delay altseason further.
Source:
https://twitter.com/SuperBitcoinBro/status/1995575743070507303
Altcoins (2-Week Bollinger Band Compression)
Insight: Osemka’s chart of total altcoin market cap using 2-week Bollinger Bands shows historically tight compression.
Implication: Similar compressions in prior years were followed by major breakouts to the upside, suggesting a large move is brewing for altcoins once the range resolves.
Source:
https://twitter.com/i/status/1996489267053211853
ETH/BTC (Local Bottom & Uptrend Formation)
Insight: Sykodelic highlights the ETH/BTC pair showing evidence of a local bottom and beginning of a sustained uptrend.
Macro read-through: Historically, an ETH/BTC uptrend has been a key precursor to altcoin season, as capital rotates out along the risk curve once Bitcoin stabilizes.
Source:
https://twitter.com/i/status/1997141452107784313
Russell 2000 (Leading Indicator for Bitcoin Cycle Top)
Insight: SuperBro also shares a Russell 2000 chart suggesting that when the index makes new all-time highs, it tends to lead a Bitcoin cycle top by at least 10 months.
Timing implication: Under this framework, a new ATH in Russell 2000 now would imply a potential Bitcoin top around August 2026.
Source:
https://twitter.com/i/status/1996450582434021450
Russell 2000 vs. Bitcoin (Parabolic Setup)
Insight: AO overlays Russell 2000 and Bitcoin, showing that once Russell breaks out to new all-time highs, Bitcoin often enters a multi-month parabolic run.
Interpretation: If RUT confirms a breakout, it may be the macro “starter pistol” for the next powerful crypto leg higher.
Source:
https://twitter.com/AO_btc_analyst/status/1997375507889840553
Summary
Altcoins are tightly coiled. Structural patterns on $OTHERS, multi-year Bollinger Band compression, ETH/BTC uptrend signals, and Russell 2000 leadership all point to rising risk appetite and the potential for a powerful altcoin breakout once macro and Bitcoin conditions align. The stage is being set; the question is less “if” than “when.”
5. Global Policy Dynamics & Cycle Structure: The Extended Cycle Case Strengthens
Growing evidence across liquidity cycles, cross-asset ratios, and macro policy shifts support an extended crypto cycle rather than a traditional 4-year structure.
Macro (August 2024 Analog – Rate Divergence)
Insight: Benjamin Cowen highlights a setup similar to August 2024, where the Fed cut rates while the Bank of Japan raised rates.
Historical precedent: That divergence coincided with a local Bitcoin bottom in mid-December, suggesting a similar pattern could emerge in December 2025 under comparable policy dynamics.
Source:
https://twitter.com/intocryptoverse/status/1995525540338352263
Macro (Copper/Gold & ETH/BTC – Extended Cycle Rotation)
Insight: Uncut Hopium ties together ETH/BTC and the Copper/Gold ratio as indicators of emerging risk appetite once the business cycle moves into expansion.
Thesis: As liquidity returns through QT ending, balance sheet expansion, and eventual rate cuts, flows rotate into higher-beta assets like ETH, altcoins, and cyclicals, supporting an extended crypto cycle rather than an already-finished one.
Source:
https://twitter.com/Uncut_Hopium/status/1997432399559311554
Macro (Liquidity Cycle & Breaking the 4-Year Crypto Cycle)
Insight: Bull Theory argues that changes in the liquidity cycle—including QT ending and structural shifts in how liquidity is injected—mean the traditional 4-year crypto cycle is likely to break this time.
Conclusion: The bull market is not over; it has simply been delayed by the lag between liquidity stress and policy response.
Source:
https://twitter.com/i/status/1996937525089513966
Extended Cycle Probability Models (Grok, ChatGPT, Gemini)
Insight: Three independent AI models were asked to estimate the probability of an extended crypto cycle vs a traditional 4-year cycle:
- Grok: 65% probability of an extended cycle.
- ChatGPT: 65% probability of an extended cycle.
- Gemini: 75% probability of an extended cycle.
Sources:
Cycle Continuation Case (James Bull)
Insight: James Bull (via MariusCrypt0) outlines multiple structural and technical reasons why it is highly unlikely that the current bull run is over.
Theme: As long as liquidity continues to trend supportive and the macro expansion is incomplete, the path of least resistance remains skewed toward bullish continuation.
Source:
https://twitter.com/MariusCrypt0/status/1995630414958932006
Summary
Macro policy, liquidity cycles, and cross-asset indicators increasingly favor an extended crypto cycle narrative over a completed 4-year halving cycle. From rate divergency analogs and copper/gold risk-on signals to structural liquidity arguments and AI-derived probabilities, the emerging consensus across frameworks is that the cycle has been delayed—not terminated.
Closing Summary
Across macro, equities, Bitcoin, altcoins, and cycle structure, the evidence is converging on a clear story:
- Equities are flashing powerful breadth thrusts and seasonality signals, historically associated with strong 12-month forward returns.
- Liquidity is quietly returning via the repo market and policy stress points like Japan’s rising yields, setting the stage for renewed easing.
- Bitcoin is surrounded by some of the strongest bottoming signals of the past decade—from on-chain metrics to liquidity oscillators and cost-basis structures.
- Altcoins are compressed but structurally poised for a breakout once Bitcoin stabilizes and Russell 2000 risk appetite confirms.
- US PMI Leading Indicators (US PMI vs Global M2, Citi Earnings Revisions, and New Orders) all continue to signal mid-cycle expansion rather than late-cycle deterioration. These models point toward further PMI upside—one of the strongest historical environments for altcoin outperformance.
- Cycle structure increasingly points to an extended cycle, supported by liquidity dynamics, cross-asset ratios, and multiple independent probability estimates.
The takeaway: rather than marking the end of the crypto bull market, current conditions look more like a “December inflection”—a period where breadth thrusts, liquidity sparks, and cycle delays converge to create a powerful reversal window for the year ahead.
Indicator Summary Table
| Instrument | Indicator Name | Insight | Source Link |
|---|---|---|---|
| Altcoins | $OTHERS Head & Shoulders | Do or die moment for altcoins | Link |
| Altcoins | 2W Bollinger Band Compression | Breakout to the upside potential for altcoins | Link |
| Bitcoin | True Market Mean Bounce | Potential institutional support | Link |
| Bitcoin | Death Cross Bottom Model | 11/12 accuracy on bottoms | Link |
| Bitcoin | USDT Dominance Rejection | Historically aligns with local lows | Link |
| Bitcoin | Velocity RSI (3D) | Matches prior bear market bottoms | Link |
| Bitcoin | Real Buying/Selling Pressure | Similar to Aug 2024 & Apr 2025 lows | Link |
| Bitcoin | Sharpe Ratio Bottom Pattern | Bear market lows suggest major bottom formation | Link |
| Bitcoin | STH Profit/Loss Ratio | Mirrors April 2025 bottom | Link |
| Bitcoin | Monthly Open Pattern | High/low often set within ~12 days | Link |
| Bitcoin | Global Liquidity Oscillator Discount | BTC below 97% of implied values | Link |
| Bitcoin | Binance Reserve Ratio | Clusters around historical bottoms | Link |
| ETH/BTC | ETH/BTC Uptrend | Often precedes altcoin season | Link |
| Nasdaq | 8-Day Win Streak | +18% avg, 91% positive (1Y) | Link |
| Nasdaq | % Above 10D MA (Breadth Thrust) | ~25% avg, 90% positive (1Y) | Link |
| Russell 2000 | Leads BTC Top by ~10 Months | Suggests Aug 2026 BTC top | Link |
| Russell 2000 | Parabolic BTC Setup Signal | ATH breakouts precede BTC runs | Link |
| S&P 500 | McClellan Oscillator Surge | +17% avg, 100% positive (1Y) | Link |
| S&P 500 | December Seasonality | Early-month low tendency | Link |
| S&P 500 | Zweig Breadth Thrust Conditions | +31% avg, 100% positive (1Y) | Link |
| XLK | 9-Day Win Streak | +16% avg, 93% positive (1Y) | Link |
| Repo Market | Fed Overnight Repo Spike | Pre conditions for more liquidity expansion | Link |
| Japan Bonds | 20Y Yield Spike | Typically precedes volatility + easing | Link |
| US PMI | US PMI vs Global M2 YoY % Change | Suggests further PMI upside; liquidity expansion supportive | Internal Altcoin Screener Model |
| US PMI | US PMI vs US Citi Earnings Revisions Index | Elevated revisions imply continued PMI strength | Internal Altcoin Screener Model |
| US PMI | US PMI vs New Orders | Mild pullback but no trend deterioration | Internal Altcoin Screener Model |
Large Caps
Here’s the data on altcoin outperformance:
For large caps, here’s the ones that stand out on a long term timeframe:
- WhiteBIT Coin
- BNB
- Bitcoin Cash
Bitcoin Update
Not much has changed from last week as Bitcoin continues sideways and forms a potential bottom. It takes weeks to months for bottoms to form. Bitcoin had a relief bounce from $81,000 to $93,000. To form a bullish pattern, we need to see Bitcoin reclaim $93,000 on the weekly timeframe. If that fails to hold above $81,0000 then the next area would be $74,000-78,000. Despite all the extreme fear in the markets lately, we are still in a bull market as long as Bitcoin is holding above $74,000.
Ethereum Update
Similar to Bitcoin, not much to update as we continue sideways. Ethereum had a rally from $2700 to $3100. It could revisit the lows around $2700 before going back up. If it doesn’t hold there then next area would be $2100-2400.
Solana Update
Similar to Bitcoin, not much to update as we continue sideways. It’s hovering around $120. Either it goes sideways here for a bit before going higher or it could go lower to $100-110. Need to see Solana reclaim $160 for any bullish momentum to return.
Sui Update
Sui is still holding above the bottom of the regression channel. It could go sideways here for a bit before going higher. If it can’t hold above 1.35 then next level would be 1.10. For bullish momentum to return, the weekly needs to reclaim $2.00.
Dogecoin Update
Not much to update here either from last week. Dogecoin is hovering around $0.14. I think there’s a good chance it holds here as it’s been using this $0.14 level as support since March 2025. If this fails to hold then it will go down to $0.10-0.12. For bullish momentum to return, we need to see Dogecoin
Pepe Update
Pepe is still holding on and if it can reclaim the 0.000056 level then bullish momentum will return.
Model Portfolio Update
Despite all the fear, this is still a great spot to add to positions. Open positions are -19%.
The overall portfolio performance considering closed positions is roughly a -15% return:
