26% Of Institutions Call A Bear Market: What This Could Mean For Investors

What Happened

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.

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.

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.

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.

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.

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 the Current Crypto Market Setup Could Mean for Investors

Market Context

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.

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.

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.

“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.

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.

“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.

Why It Matters

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.

Details

This represents a sharp increase compared with the previous survey, where only 2% of institutional and 7% of non-institutional respondents expressed this view.

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.