A recent survey by Coinbase Institutional and Glassnode revealed that about a quarter of institutional and non-institutional investors believe the crypto market is entering a bearish phase.
Nevertheless, investors believe Bitcoin (BTC) is undervalued. This insight highlights a complex shift in investor sentiment amid mixed macroeconomic signals and continued volatility in early 2026.
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Investors classify crypto market as bear market
The findings are based on a survey of 148 respondents, including 75 institutional investors and 73 non-institutional investors, conducted between December 10, 2025 and January 12, 2026. Approximately 26% of institutional respondents and 21% of non-institutional respondents said they believe the cryptocurrency market is currently in a bear market (price decline) phase.
This represents a sharp increase compared to the previous survey, where only 2% of institutional respondents and 7% of non-institutional respondents expressed this view.
These perceptions are consistent with signals from the bull-bear market cycle indicator. It has remained below zero since October, which also suggests that Bitcoin is currently in a bear market.
Additionally, Julio Moreno, head of research at CryptoQuant, told BeInCrypto that Bitcoin appears to be in the early stages of a bear market, citing weakening demand as a major factor in this valuation.
“Essentially every on-chain metric and market indicator confirms that we are in an early bear market,” he said on a BeInCrypto podcast episode.
Bitcoin undervaluation narrative strengthens as investors hold firm
Nevertheless, survey data shows a significant disconnect between short-term emotions and long-term beliefs. Although bear market views have increased following the October 2025 deleveraging event, actual investor behavior tells a different story.
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As detailed in a report from Coinbase and Glassnode, 62% of institutional investors and 70% of non-institutional investors have maintained or increased their crypto allocations since October 2025.
Furthermore, 49% of institutional respondents and 48% of non-institutional respondents said they would not need to change their current allocations even if prices declined by 10% or more in the short term, as they intend to continue maintaining their existing positions.
On the other hand, 31% of institutional investors and 37% of non-institutional investors said they would buy the market even under these circumstances. This confidence is further reinforced by valuation views, with 70% of institutional investors and 60% of non-institutional investors saying Bitcoin is undervalued.
This suggests that although investors are aware of the bearish situation, their behavior suggests long-term confidence rather than risk-off behavior. This creates a market environment characterized by caution, selective accumulation, and valuation-driven positioning rather than widespread exit.
Coinbase and Glassnode Share Crypto Market Outlook for Q1 2026
Respondents weren’t the only ones maintaining a bullish outlook. David Duong, CFA, Head of Global Research at Coinbase Institutional, along with analysts at Glassnode, said their view on the crypto market in Q1 2026 remains constructive.
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“While the clouds from last year’s leveraged liquidations have not completely lifted, our outlook for the cryptocurrency market remains constructive for the start of the new year,” they wrote.
They outlined several factors that support their outlook.
Supportive inflation trends: The latest December CPI reading showed inflation holding steady at 2.7%, allaying concerns about the potential impact of tariffs. Solid economic growth: As of January 14, the Atlanta Fed’s GDPNow model projects real GDP growth in the fourth quarter of 2025 at 5.3%. Potential Monetary Policy Tailwinds: Analysts suggested the Federal Reserve is likely to implement two rate cuts totaling 50 basis points, as currently priced into federal funds futures. Such easing is likely to provide support for risky assets, including cryptocurrencies.
He added that the outlook could become more constructive if there are significant policy developments in the US, particularly with respect to the CLARITY Act. Such developments could encourage broader participation in the crypto market and help strengthen overall investor sentiment.
“Our greater concern is that a significant rise in inflation, a spike in energy prices, or a significant escalation in geopolitical tensions could necessitate a more cautious approach to risk assets,” the report said.
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What the current cryptocurrency market regime means for investors
Against this backdrop, some crypto market participants see the current environment as an opportunity rather than a capitulation phase. According to data from Santiment, several large cryptocurrencies have negative 30-day market value-to-realized value (MVRV) ratios.
According to the company, assets such as Chainlink, Cardano, Ethereum, and XRP currently appear to be undervalued based on this metric, while Bitcoin is believed to be slightly undervalued. Santiment noted that a lower 30-day MVRV measurement suggests a lower risk of adding to or opening a position.
“A coin with a negative percentage means the average trader you are competing against is down money and there is an opportunity to enter while profits are below the normal ‘zero-sum game’ level. The greater the negative, the safer it is to buy,” the post reads.
Additionally, analyst CyrilXBT drew attention to market sentiment. The analyst noted that the Crypto Fear and Greed Index remains in a state of “fear” but has not reached panic levels. According to CyrilXBT:
“That’s usually not where the market collapses, but where boredom and frustration peak. Historically, this is where positioning happens quietly before direction emerges.”
Overall, the survey results and supporting market data point to a nuanced market situation rather than a complete capitulation. Although a growing proportion of investors now perceive the current situation to be bearish, sustained allocations and widespread undervaluation views suggest that long-term confidence remains intact.
Nevertheless, markets remain highly volatile and macroeconomic headwinds continue to have a significant impact, underscoring the importance of remaining vigilant.
