Coinbase Institutional: Excessive speculation has been suppressed, and low leverage means reduced risk of a major drop before the end of the year

Coinbase Institutional stated that the turmoil in November reshaped the market landscape: the open interest of BTC/ETH/SOL perpetual contracts decreased by 16% month-over-month; there was a $3.5 billion outflow of BTC and a $1.4 billion outflow of ETH from U.S. spot ETFs; the funding rate for BTC perpetual contracts briefly fell below 2σ of the 90-day average, before recovering.

These changes lay the groundwork for a stable situation in December, and the institution believes it can remain cautiously optimistic, as excessive speculation has been curbed. The systemic leverage tracking purely speculative positions has stabilized around 4%-5% of the total market capitalization, down from about 10% this summer. Lower leverage indicates a healthier market structure and reduces the risk of a significant decline before the end of the year.