Bi-Weekly Crypto Market Review: December 1–15, 2025

The first half of December 2025 marked a clear transition phase for crypto markets. After the violent liquidation-driven reset in late November, the market entered December not in panic — but in recalibration mode. Volatility compressed, leverage reset, narratives cooled, and liquidity behavior shifted from aggressive speculation to selective positioning.

This period was not about explosive upside or dramatic breakdowns. Instead, it was about structure: who survived the November flush, where capital chose to sit afterward, and how the market prepared for the final weeks of the year.

December 1–15 will likely be remembered not for price extremes, but for something more important: the market quietly deciding what 2026 will look like.

This bi-weekly report breaks down:

• What actually happened across BTC, ETH, alts, and perps

• How liquidity behaved after the November shock

• What changed in positioning and narrative structure

• Why volatility compression matters right now

• What to realistically expect into late December and year-end

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1. Market Context: Entering December After a Systemic Reset

The market entered December immediately after one of the most meaningful leverage resets of the year.

Late November delivered:

• aggressive perp liquidations

• sharp BTC drawdowns

• funding collapses

• ETF outflow spikes

• forced deleveraging across alts

By December 1st, most of that damage had already been done.

This matters because December did not begin in panic — it began in post-panic equilibrium.

Key context entering December:

• leverage had already been flushed

• open interest (OI) was materially lower than November highs

• funding across venues normalized

• spot selling pressure slowed

• volatility began compressing

This set the tone for the first half of the month.

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2. Bitcoin: Range-Bound, ETF-Anchored, Structurally Stable

2.1. BTC Price Behavior: Compression, Not Breakdown

Throughout December 1–15, Bitcoin largely traded in a tight, well-defined range, showing neither panic selling nor breakout momentum.

Key characteristics:

• lower volatility than late November

• shallow intraday ranges

• declining liquidation frequency

• reduced directional aggression

• stable spot demand

This is exactly how BTC behaves when:

• ETF flows stabilize

• leverage has already been cleared

• macro participants pause risk decisions

• year-end positioning begins

Rather than chasing direction, BTC became an anchor asset again.

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2.2. ETF Flows: From Shock to Normalization

One of the most important shifts during this period was ETF flow behavior.

After heavy November outflows:

• early December saw flow stabilization

• outflows slowed significantly

• some days flipped back to marginal inflows

• volatility around ETF headlines decreased

This signaled something critical:

Institutional capital was not exiting crypto — it was rebalancing risk.

That distinction matters going into year-end.

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2.3. BTC Dominance: Quiet Strength

Bitcoin dominance ticked slightly higher during this period, not because BTC was rallying aggressively, but because:

• alt volatility collapsed faster than BTC volatility

• speculative capital stayed sidelined

• risk appetite narrowed

This is typical behavior in:

• post-liquidation environments

• December seasonality

• pre-year-end portfolio positioning

BTC’s role was not to lead — it was to absorb liquidity.

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3. Ethereum: Lagging, But Structurally Important

3.1. ETH Underperformance Was Not a Bear Signal

ETH underperformed BTC modestly during this period, but context matters.

ETH weakness was driven by:

• lower speculative demand post-flush

• declining L2 narrative velocity

• reduced retail leverage

• lack of immediate catalysts

However, structurally:

• ETH did not break key support levels

• ETH funding normalized cleanly

• ETH OI stabilized faster than most alts

• staking and restaking flows remained steady

This was not capitulation — it was cooling.

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3.2. ETH/BTC: Transition Phase

ETH/BTC remained soft but stable.

That tells us:

• rotation into ETH had not yet begun

• but rotation away from ETH was also exhausted

Historically, this phase often precedes:

• either renewed ETH leadership

• or extended BTC-led consolidation

The ETH/BTC behavior during December 1–15 was a neutral setup, not a breakdown.

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4. Altcoins: Post-Flush Survival Mode

4.1. Alt Market Reality: Damage Was Already Done

Most altcoins did not experience dramatic moves during this period — because the damage happened earlier.

By December:

• forced sellers were gone

• weak hands had exited

• leverage was significantly reduced

• speculative volume dried up

As a result, alts entered survival mode, not collapse mode.

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4.2. Fragmentation Intensified

Rather than broad alt moves, the market showed:

• isolated strength in select AI names

• short-lived bounces in memecoins

• L2 tokens stabilizing without momentum

• RWAs acting defensively

This fragmentation is typical of:

• late-year markets

• post-liquidation environments

• liquidity-constrained phases

There was no altseason — but also no systemic alt panic.

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5. Perpetual Markets: Deleveraged, Disciplined, Quiet

5.1. OI Reset Was the Defining Feature

By December 1, perp markets looked very different than mid-November.

Key changes:

• total OI down materially

• leverage reduced across all sectors

• liquidation cascades largely absent

• funding rates close to neutral

This created a low-stress derivatives environment.

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5.2. Funding: Boring on Purpose

Funding across most majors:

• hovered near zero

• showed little divergence

• lacked extreme bias

This is exactly what healthy markets look like after a flush.

It also tells us:

• traders were cautious

• size was reduced

• conviction was low

• patience dominated

Markets were waiting.

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5.3. Hyperliquid & On-Chain Perps: Early Stabilization

On-chain perp venues showed:

• faster stabilization than many CEXs

• cleaner OI rebuilds

• more disciplined positioning

This reinforced a recurring 2025–2026 theme:

On-chain perps absorb shocks faster and reset cleaner than centralized venues.

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6. Liquidity Behavior: The Most Important Signal of the Period

6.1. Stablecoin Velocity Slowed — But Did Not Reverse

One of the most critical observations of December 1–15:

Stablecoins did not exit crypto — they stopped moving aggressively.

This is subtle but crucial.

What we saw:

• stablecoin supply remained elevated

• velocity slowed

• fewer cross-chain rotations

• less aggressive perp collateral deployment

This suggests:

• capital chose to wait, not flee

• risk appetite paused, not collapsed

That is bullish structurally, even if price action is boring.

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6.2. Liquidity Parked, Not Destroyed

After November:

• liquidity parked in stables

• parked in BTC

• parked in defensive yield strategies

• parked off leverage

This creates latent upside potential.

Liquidity that is parked can redeploy quickly.

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7. Narratives: Cooling, Not Dying

December 1–15 was not a narrative explosion period.

Instead:

• AI narratives cooled after Q4 spikes

• L2 hype slowed

• memecoins went quiet

• RWAs stayed steady but unexciting

This narrative cooldown is typical:

• after intense months

• before year-end

• during low liquidity windows

Importantly, narratives did not collapse — they paused.

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8. What the Market Was Really Doing: Year-End Positioning

The dominant behavior of this period was positioning, not trading.

8.1. Institutions: Risk Control Mode

Institutions:

• reduced leverage

• locked in profits

• avoided new risk

• prepared year-end books

This is normal December behavior.

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8.2. Traders: Waiting for Signals

Active traders:

• reduced size

• avoided overtrading

• focused on short-term mean reversion

• waited for volatility expansion

Few were willing to commit aggressively.

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8.3. Retail: Fatigued

Retail participation dropped:

• after November losses

• due to lack of excitement

• because narratives stalled

This also historically precedes cleaner setups later.

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9. What to Expect for Late December 2025

Looking ahead into December 16–31, several scenarios matter.

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9.1. Base Case: Continued Compression Into Holidays

The most likely scenario:

• BTC remains range-bound

• volatility stays low

• alts remain selective

• perps stay disciplined

• liquidity remains parked

This is a setup phase, not a dead market.

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9.2. Upside Risk: Thin-Liquidity Breakouts

Late December carries:

• thin books

• lower participation

• higher sensitivity to flows

That means:

• small catalysts can move price disproportionately

• breakouts can happen without strong volume

• moves may lack follow-through

Be cautious chasing holiday pumps.

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9.3. Downside Risk: Limited, But Possible

Downside risks exist:

• macro headlines

• unexpected ETF flow shocks

• leverage creeping back too fast

However, given:

• leverage already flushed

• funding neutral

• OI low

Any downside is more likely to be controlled, not cascading.

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10. Strategic Outlook Into Year-End and Early 2026

December 1–15 suggests something important:

The market is not ending a cycle — it is digesting one.

Key takeaways:

• November flushed excess

• December stabilized structure

• liquidity remained inside crypto

• leverage reset cleanly

• narratives paused, not died

This sets up:

• cleaner Q1 2026 conditions

• renewed rotation potential

• healthier volatility expansion

• more sustainable trends

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11. How to Think About Positioning Right Now

For investors

• patience beats aggression

• focus on structural winners

• avoid chasing thin liquidity moves

For traders

• trade smaller

• wait for volatility expansion

• respect holiday conditions

• watch OI and funding closely

For everyone

• the reset already happened

• the next opportunity comes after boredom

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12. Final Thoughts

The first half of December 2025 was not exciting — and that’s exactly why it matters.

Markets don’t transition cleanly from chaos to mania.
They pass through quiet, uncomfortable, boring phases where structure resets and capital repositions.

December 1–15 was one of those phases.

And historically, those phases are where the foundation for the next move is built.

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