A recent survey by Coinbase Institutional and Glassnode reveals that around one-quarter of both institutional and non-institutional investors view the crypto market as being in a bear phase.
Despite this, investors believe Bitcoin (BTC) is undervalued. The insights highlight a complex shift in investor psychology amid mixed macroeconomic signals and ongoing volatility in early 2026.
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Investors Classify the Crypto Market as Bearish
The findings are based on a survey of 148 respondents conducted between December 10, 2025, and January 12, 2026, including 75 institutional and 73 non-institutional investors. Around 26% of institutional respondents and 21% of non-institutional respondents reported that they believe the crypto market is currently in a bear market (markdown) phase.
This represents a sharp increase compared with the previous survey, where only 2% of institutional and 7% of non-institutional respondents expressed this view.
These perceptions are consistent with signals from the Bull-Bear Market Cycle Indicator. It has stayed below zero since October, which also suggests that Bitcoin is currently in a bear market.
Furthermore, Julio Moreno, Head of Research at CryptoQuant, told BeInCrypto that Bitcoin appears to be experiencing early stages of a bear market, citing weakening demand as the primary factor behind this assessment.
“Basically every on-chain metric or market metric confirms that we are in a bear market in the early stages,” he stated in a BeInCrypto podcast episode.
Bitcoin Undervaluation Narrative Strengthens as Investors Hold Firm
Despite this, the survey data points to a notable disconnect between short-term sentiment and long-term conviction. After the October 2025 deleveraging event, bear market perceptions rose, but actual investor actions tell a different story.
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As detailed in the Coinbase and Glassnode report, 62% of institutions and 70% of non-institutional investors have either held or grown their crypto allocations since October 2025.
Additionally, 49% of institutional respondents and 48% of non-institutional respondents stated that a short-term price drop of more than 10% would not prompt any changes to their current allocations, as they intend to continue holding existing positions.
Meanwhile, 31% of institutional investors and 37% of non-institutional investors indicated they would buy the dip under such conditions. This confidence is further underscored by valuation views, with 70% of institutions and 60% of non-institutional investors stating that Bitcoin is undervalued.
This suggests that investors do acknowledge bearish conditions, but their actions imply 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 disengagement.
Coinbase and Glassnode Share Q1 2026 Crypto Market Outlook
The respondents are not alone in maintaining a bullish outlook. David Duong, CFA, Global Head of Research at Coinbase Institutional, along with an analyst from Glassnode, also noted that their view on the crypto market in Q1 2026 remains constructive.
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“Our outlook on crypto markets is constructive to start the new year, even though the clouds from last yearʼs leverage-fueled liquidations have not cleared entirely,” they wrote.
They outlined several factors that support their outlook:
- Supportive inflation trends: Inflation held steady at 2.7% in the latest December CPI reading, easing concerns about the potential impact of tariffs.
- Resilient economic growth: As of January 14, the Atlanta Fed’s GDPNow model projected real GDP growth of 5.3% for the fourth quarter of 2025.
- Potential monetary policy tailwinds: The analysts suggested that the Federal Reserve will likely deliver 2 interest rate cuts totaling 50 basis points, as currently priced into Fed funds futures. Such easing would likely provide support for risk assets, including cryptocurrencies.
They also added that their outlook could become more constructive if there is major policy progress in the US, particularly around the CLARITY Act. Such developments could encourage broader participation in the crypto market and help strengthen overall investor sentiment.
“What would make us more concerned: A meaningful uptick in inflation, a spike in energy prices, or a significant flare up of geopolitical tensions could warrant a more cautious approach to risk assets,” the report read.
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What the Current Crypto Market Setup Could Mean for Investors
Amid this backdrop, some crypto market participants view the current environment as an opportunity rather than a capitulation phase. Data from Santiment shows that the 30-day Market Value to Realized Value (MVRV) ratios for several large-cap cryptocurrencies are negative.
According to the firm, assets such as Chainlink, Cardano, Ethereum, and XRP currently appear undervalued based on this metric, while Bitcoin is considered mildly undervalued. Santiment noted that lower 30-day MVRV readings typically suggest lower risk for adding or opening positions.
“A coin having a negative percentage means average traders you’re competing with are down money, and there is an opportunity to enter while profits are below the normal ‘zero-sum game’ level. The more negative, the more safe it is for you to buy,” the post read.
In addition, analyst CyrilXBT drew attention to the market sentiment. The analyst noted the Crypto Fear & Greed Index remains in “fear,” but has not reached panic levels. According to CyrilXBT,
“That’s usually where boredom and frustration peak, not where markets break. Historically, this is where positioning happens quietly before direction shows itself.”
Overall, the survey results and supporting market data point to a nuanced market phase rather than outright capitulation. While a growing share of investors now identify current conditions as bearish, sustained allocations and widespread undervaluation views suggest that long-term conviction remains intact.
Nonetheless, the market remains notably volatile, with macroeconomic headwinds continuing to exert a substantial influence, highlighting the importance of maintaining caution.
