Coinbase and Glassnode Q1 2026 Crypto Market Report: Structural Turning Point Has Arrived

At the beginning of 2026, the global digital asset market has taken on a new look after experiencing a deleveraging cleanse in the previous year. The “Charting Crypto Q1 2026” report, jointly released by Coinbase Institutional and the leading on-chain data analysis platform Glassnode, provides market participants with authoritative insights. The report points out that market risks have not disappeared but are being re-priced.

Market Structure Rebuilding

The way the digital asset market entered 2026 is markedly different from the past. According to the core conclusions of the report, the market opened with a cleaner structure, lower leverage, and more cautious risk expression. This marks the market’s move toward maturity.

The deleveraging event in October last year became a watershed for the market, with a large number of perpetual futures positions liquidated. Glassnode data shows that systemic leverage has fallen to approximately 3%, a figure calculated based on the total market capitalization of cryptocurrencies excluding stablecoins.

Risks have not been abandoned by the market but are being re-priced. Investors are reallocating risk exposure to the options market, reflecting a market preference for exposure to deterministic risks.

Bitcoin’s Dominance Remains Steady

Bitcoin continues to lead the entire crypto market structurally. The report shows that even though small- and mid-cap assets failed to maintain previous gains, Bitcoin’s dominance remains around 59%. This consolidation of dominance is no coincidence. Investor holding patterns show clear distribution characteristics: in Q4 last year, the active supply of Bitcoin within three months increased to 37%, while the long-dormant supply moderately decreased.

Market sentiment towards Bitcoin remains restrained. The net unrealized profit/loss shifted from a “belief” state during the October liquidation event to “anxiety,” and has since stabilized at a lower level.

Market Sentiment and Derivatives Landscape

Entering Q1 2026, Bitcoin market sentiment remains subdued. Historical data indicates that prolonged “anxiety” phases often coincide with consolidation periods. Investors tend to stay engaged but are reluctant to re-accept directional risk during this phase. Structurally, if volatility diminishes or macro conditions remain stable, there is room for market sentiment to improve.

The derivatives market landscape has undergone a fundamental shift. Open interest in Bitcoin options now exceeds that of perpetual futures. Part of this phenomenon is due to positions increasingly concentrating in protective structures, as market participants hedge against further declines. From a structural perspective, this transition supports a more resilient trading environment.

Ethereum’s Cyclical Signals

Ethereum appears to be approaching the late stage of its current price cycle, which began at the lows in June 2022. Although Ethereum achieved significant gains during this period, recent data suggests that cycle-based signals are losing explanatory power.

Structural changes within the Ethereum ecosystem—including fee compression on Layer 2 solutions and the evolving network economy—have diluted the predictive capacity of traditional cycle frameworks. Therefore, while Ethereum’s late-cycle characteristics are becoming more apparent, the timing of the cycle itself is increasingly insufficient as an independent guide for future performance. Market outcomes are now more likely influenced by broader liquidity conditions and relative positioning.

Selective Optimism Among Institutional Investors

Among the broader institutional investor community, sentiment remains selectively constructive. Survey responses in the report indicate that, amid ongoing geopolitical uncertainties, investors prefer exposure to large-cap crypto assets. This aligns with current capital flows. In the macro landscape, gold, as a traditional safe-haven asset, has performed exceptionally well, contrasting sharply with the sideways movement of the crypto market. This suggests that, under current macro uncertainties, market funds are shifting from assets like Bitcoin to traditional safe havens such as gold and silver.

According to Gate Market data, as of January 28, 2026, both Bitcoin (BTC) and Ethereum (ETH) are in key price zones, with the following specifics:

Technical Outlook and Future Prospects

From a technical analysis perspective, the market is in an accumulation and bottoming phase. Bitcoin’s key resistance level is around $92,000; a decisive break above could confirm new upward momentum.

On the downside, $89,000 is an important support; losing this level could lead to testing lower support zones. Market volatility has been compressed, indicating that once new directional signals emerge, sharp price movements could follow.

Analysts generally believe that, despite short-term sentiment suppression, the fundamentals are supported by Layer 2 upgrades for assets like Ethereum, a resilient ecosystem, and long-term institutional allocation trends.

The crypto market is quietly building an invisible barrier. While traditional safe-haven assets like gold are approaching $5,000 per ounce, Bitcoin remains stable near the psychological level of $89,000. Ethereum’s staked amount has hit a record high of 30.24 million ETH, accounting for 25.1% of its circulating supply, while validator daily exits are at historic lows. This pattern of “weak prices but solid fundamentals” often signals the arrival of a larger trend in the future.