The performance of BTC and ETH in December may primarily be influenced by several key factors.

1. ETF inflows for both BTC and ETH have shown notable growth. BTC ETFs recorded a net inflow of $5.6 billion in November, while ETH ETFs saw a single-day increase of $300 million, marking a historical high. ETH ETFs, in particular, shifted from net outflows to net inflows during November, signaling increasing interest from traditional finance in the Ethereum ecosystem.
2. In the secondary market, ETH has experienced consecutive price increases recently. However, the implied volatility of 1-day options has remained stable, indicating that the recent breakout above $3,600 was driven by spot accumulation rather than speculative activity. This trend suggests ETH may continue to rise, and the ETH/BTC exchange rate, which shows signs of bottoming and rebounding, is worth monitoring.
3. Sustained net inflows of stablecoins are providing liquidity to the crypto market. Data from DeFiLlama indicates that stablecoins added $20 billion in November, supporting the broader market. This inflow trend is unlikely to reverse in the short term, suggesting that the market’s momentum will persist.

Several events could significantly impact BTC and ETH.

1. Microsoft is reportedly considering purchasing BTC, and if this proposal is approved by its board of directors, it could become a major bullish catalyst for the market.
2. A meme coin issuance platform, Clanker, recently emerged on Base. If Clanker generates several popular meme coins, it may stimulate activity in the Ethereum ecosystem, boosting demand for ETH.
3. Another key factor is the upcoming departure of SEC Chair Gary Gensler on January 20. A potential successor, Paul Atkins, is considered supportive of cryptocurrencies and friendly toward the Ethereum ecosystem and DeFi systems, which could have a positive impact on the market.

Based on these factors, BTC is expected to fluctuate between $85,000 and $120,000 in December, while ETH is projected to range between $3,000 and $4,500, with a 70% confidence interval.

According to the options market, the likelihood of ETH surpassing its previous high of $4,900 in December is 11.1%, reflecting low expectations for a breakout.

However, renewed activity and increased capital flow in the Ethereum ecosystem could lead to sustained growth and potentially a new high.

Ryan Lee, Chief Analyst at Bitget Research