According to Coinbase’s Q2 2026 crypto report, prepared in collaboration with Glassnode, the cryptocurrency market is expected to bottom out soon.
Notably, in the first quarter of 2026, the global cryptocurrency market capitalization fell by 18%. At the same time, the stablecoin market grew from $308 billion to $318 billion.
That said, approximately 70% of non-institutions and 82% of institutions have categorized the crypto market as being in:
Either the bear market (downgrade) or the late bear market phase.
While this may look worrying at first glance, it is quite a jump from 1% and 36% respectively in December 2025.
Price overview: Bitcoin and Ethereum
When examining the sentiment on the price front, most investors consider Bitcoin [BTC] to be “undervalued” given current price levels.
Simply put, according to the institutions, current price action does not fully reflect future demand for the asset.
This coincided with Bitcoin trading at $77,057.04 at the time of writing, up over 13% in the last 30 days. While Spot Bitcoin ETF recorded inflows worth $2.135 billion in the month of April alone.
On the other hand, from the beginning of the second quarter of 2026, the sentiment around Ethereum [ETH] has been changed to ‘hope’.
This implies that the market may have been cleared of some players who were only concerned with speculation. This follows ETH’s price trading at $2,324.01 at the time of writing, up 12% from the previous month.
In light of all this, the report claimed that the outlook for the cryptocurrency markets in the second quarter of 2026 is ‘neutral’.
What can you expect next?
Taking this into account, it is certain that the geopolitical tensions in the Middle East were the main event that affected the performance of the crypto market in the first quarter of 2026.
However, other “idiosyncratic factors,” such as regulatory developments, especially those related to the CLARITY Act, and the rise of agentic AI, have also had a significant impact on the crypto market.
Interestingly, Goldman Sachs had also predicted some time ago that the cryptocurrency market might have bottomed out.
Simply put, this indicates that a recovery is likely to occur in the final quarters of 2026. However, as long as the Crypto Fear and Greed Index remains in the ‘fear zone’, it will continue to fuel skepticism.
Final summary
- The crypto market experienced volatility in the first quarter of 2026, losing 18% of capitalization even as stablecoins expanded.
- Despite continued geopolitical and regulatory pressure, institutional sentiment suggests the market may be nearing its bottom.