The cryptocurrency market has entered December with a sharp shift in momentum, as altcoins rally in a clear V-shaped pattern, Bitcoin issues a historically rare bullish signal, and the Federal Reserve injects $13.5 billion in liquidity, the second-largest such operation since the COVID-19 pandemic.
Traders now want to know if this group of catalysts marks the beginning of a full market reversal.
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Altcoins Erase Losses in V-Shaped Recovery as Bitcoin Flashes Rare Parabolic Signal
Altcoins are driving December’s turnaround after one of the strongest 24-hour rallies in months.
“Altcoins just printed a strong V-shaped recovery, erasing all disadvantages. In 24 hours, they have risen to the warm-up quadrant, where rallies and breakouts ignite. But there is one condition: BTC must stabilize and recover $93,500,” Altcoin Vector warned in a post.
Historically, the V-shaped pattern appears before broader trend changes, but only if Bitcoin confirms the macro direction.
Several analysts believe that a confirmation signal may already be forming. According to Gert van Lagen, Bitcoin’s monthly Bollinger Bandwidth has fallen below 100, a rare technical event that preceded all of Bitcoin’s major parabolic rallies in the last decade.
If history repeats itself, Bitcoin may be gearing up for its next major expansion phase, provided it can retake the $93,500 resistance level.
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Institutions take a step back: Vanguard, BoA, Tether
Santiment social data indicates a sharp increase in institutionally driven narratives on cryptocurrency platforms. Vanguard, which manages $11 trillion, reversed its anti-crypto stance and opened trading of Bitcoin, Ethereum, XRP and Solana ETFs to more than 50 million clients.
Bank of America followed and allowed advisors to recommend a 1% to 4% cryptocurrency allocation starting in January 2026.
“… [these developments] “They point to growing institutional acceptance and widespread adoption of cryptocurrencies,” Santiment noted.
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Strong stablecoin inflows, including the minting of $1 billion of Tether on Tron, and anticipation of Ethereum’s Fusaka upgrade are further supporting the early December rally.
Fed’s $13.5 billion liquidity shock revalues markets
The most unexpected catalyst emerged on December 1, when the Federal Reserve injected $13.5 billion through an overnight repo. The move, which signaled increased pressure within the financial system, was one of the largest liquidity injections since the COVID-19 pandemic.
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The general sentiment is that this move could prevent further declines or increase short-term risk appetite” ahead of the December rate decision. Analyst Tracy Jin believes Bitcoin’s rebound was a direct response to the liquidity signal.
“In risk markets, ‘do not adjust further’ is often enough to change positioning,” he said.
However, analyst Brett cautioned against assuming this is the start of quantitative easing, suggesting it is a warning light within the financial system.
The market now depends on whether Bitcoin can reclaim the critical level of $93,500. If BTC stabilizes and confirms the rare Bollinger Bands signal, the V-shaped bounce from early December could turn into a full reversal supported by liquidity, institutional flows and seasonal strength.
Otherwise, volatility may return as macroeconomic and liquidity conditions continue to change.