Crypto bottom may be in sight but recession risk clouds the outlook: Coinbase
After a turbulent start to the year, there are tentative signs that the worst may be behind crypto markets, according to a joint report issued by Coinbase Institutional and Glassnode.
However, with the IMF cutting its global growth forecast to 3.1% and Oxford Economics warning of a potential recession scenario as severe as 1.4% GDP growth, the firms stopped short of an outright bullish call.
“Our outlook on crypto markets is neutral for 2Q26. The persistent and elevated levels of uncertainty surrounding the current geopolitical landscape make it extremely challenging to take short-term positions with conviction,” David Duong, Global Head of Research at Coinbase, noted.
Macro liquidity conditions and geopolitical risks tied to the Middle East continue to dominate price discovery across risk assets, including crypto.
Energy market disruptions remain the key variable, with any escalation threatening to quickly override crypto-native catalysts such as regulatory progress and the rise of agentic AI, factors the firms describe as structurally important but currently playing “second fiddle” to the greater uncertainty.
Despite these headwinds, there are emerging signs of stabilization, with technical indicators across crypto and equities improving and suggesting the potential for near-term market support, provided geopolitical conditions do not deteriorate further.
On-chain signals
Bitcoin’s MVRV ratio suggests the market is in an “accumulation zone.” Long-term holders, those who have sat on their coins for more than 155 days, appear to be adding to positions rather than selling. Short-term speculative supply dropped by 37% during the first quarter.
For Ethereum, the network’s NUPL metric dipped into “capitulation” territory during February’s sell-off. It lingered there for most of the quarter before showing early signs of shifting toward “Hope” in late March.
Stablecoin supply sitting on Ethereum is near all-time highs, and the total value of tokenized real-world assets on the network keeps climbing.
Ether has actually outperformed major layer 2 tokens since October 2025, suggesting capital is rotating back toward the base layer.
Stablecoins as a waiting room
Total stablecoin supply grew from $308 billion to roughly $318 billion during the first quarter, even as the broader market bled.
When traders sell crypto but park the proceeds in stablecoins rather than cashing out into fiat, they’re essentially sitting in the lobby instead of leaving the building. A meaningful pool of capital remains on the sidelines, ready to re-enter if conditions improve.
Survey results contradict themselves
A survey of 91 global investors conducted between mid-March and early April reveals a striking contradiction.
Roughly 82% of institutional respondents now classify the market as being in a bear or late-bear phase, up dramatically from 31% in December 2025. And yet, three out of four of those same institutions say Bitcoin is undervalued at current prices. Only 7% think it’s overpriced.
