A recent survey conducted by Coinbase Institutional and Glassnode shows that about a quarter of both institutional and non-institutional investors see the crypto market as being in a bear phase.
Nevertheless, investors believe that Bitcoin (BTC) is undervalued. The insights point to a complex shift in investor psychology amid mixed macroeconomic signals and persistent volatility early in 2026.
Investors view the crypto market as bearish
The results are based on a survey of 148 participants conducted between December 10, 2025, and January 12, 2026, of which 75 were institutional and 73 were non-institutional investors. Approximately 26% of institutional and 21% of non-institutional participants reported that they believe the crypto market is currently in a bear market (markdown) phase.
This is a significant increase compared to the previous survey, where only 2% of institutional and 7% of non-institutional participants expressed this viewpoint.
These perceptions align with signals from the Bull-Bear Market Cycle indicator. It has been below the zero point since October, which also suggests that Bitcoin is in a bear market.
Moreover, Julio Moreno, Head of Research at CryptoQuant, told BeInCrypto that Bitcoin appears to be experiencing the early stages of a bear market, with weakened demand cited as the primary reason behind this assessment.
"Almost every on-chain metric or market measure fundamentally confirms that we are early in a bear market," he stated in a BeInCrypto podcast episode.
The Bitcoin undervaluation narrative is strengthened as investors hold onto their positions
Yet, the survey data points to a significant difference between short-term sentiment and long-term conviction. After October 2025’s deleveraging event, the perception of a bear market increased, but investor actions tell a different story.
As described in the report from Coinbase and Glassnode, 62% of institutions and 70% of non-institutional investors have either maintained or increased their crypto allocation since October 2025.
Additionally, 49% of institutional and 48% of non-institutional participants stated that a short-term price drop of more than 10% would not lead to changes in their current allocation, as they plan to hold onto their positions.
At the same time, 31% of institutional and 37% of non-institutional investors indicated that they would buy under such conditions. This confidence is further underscored by valuations, as 70% of institutions and 60% of non-institutional investors believe that Bitcoin is undervalued.
This indicates that investors do acknowledge bearish conditions, but their actions express long-term belief rather than risk aversion. It creates a market characterized by caution, selective accumulation, and valuation-driven strategy rather than massive withdrawals.
Coinbase and Glassnode share Q1 2026 crypto market outlook
Participants are not alone in their positive view of the market. David Duong, CFA, Global Head of Research at Coinbase Institutional, along with an analyst from Glassnode, also noted that their outlook on the crypto market in Q1 2026 remains constructive.
"Our view on the crypto market is constructive at the start of the new year, even though the clouds from last year's gearing-driven liquidations have not yet completely disappeared," they wrote.
They have highlighted several factors supporting their view:
Stable inflation: Inflation remained at 2.7% in the latest CPI measurement for December, alleviating concerns about the impact of tariff rates.
Robust economic growth: Currently, on January 14, Atlanta's Federal Reserve GDPNow model estimates a real GDP growth of 5.3% in the fourth quarter of 2025.
Possible monetary policy tailwinds: Analysts suggest that the US central bank is likely to deliver two rate cuts totaling 50 basis points, which are already priced into Fed funds futures. Such easing is likely to support risky assets, including cryptocurrencies.
They also added that their outlook could become even more positive if significant political progress occurs in the US, particularly regarding the CLARITY Act. Such developments could increase participation in the crypto market and contribute to stronger investor sentiment overall.
"What would make us more concerned: a noticeable rise in inflation, a spike in energy prices, or greater geopolitical tensions could require a more cautious approach to risky assets," the report read.
What the current crypto market setup could mean for investors
Under these conditions, some players in the crypto market see the current environment as an opportunity rather than a capitulation phase. According to data from Santiment, the 30-day Market Value to Realized Value (MVRV) ratio for several major cryptocurrencies is negative.
According to the company, assets like Chainlink, Cardano, Ethereum, and XRP currently appear undervalued by this measure, while Bitcoin is considered slightly undervalued. Santiment pointed out that lower 30-day MVRV typically makes the risk of opening or increasing positions appear lower.
"A coin with a negative percentage means that the average traders you compete against are down on money, and there is an opportunity to enter while the gains are below the normal ‘zero-sum game’ level. The more negative, the safer it is for you to buy," the post read.
Additionally, analyst CyrilXBT focused on market sentiment. The analyst noted that the Crypto Fear & Greed Index is still in 'fear,' but has not yet reached panic levels. According to CyrilXBT,
"This is usually where boredom and frustration peak, not where markets collapse. Historically, this is where positioning occurs quietly before direction reveals itself."
Overall, the survey results and underlying market data point to a nuanced market phase rather than outright selling. Although an increasing proportion of investors now call the current conditions bearish, continued investments and widespread perception of undervaluation suggest that long-term belief remains intact.
The markets, however, continue to be characterized by significant volatility, where macroeconomic winds still have a major influence. This underscores the importance of exercising caution.
