Bitcoin is stabilizing after a period of heightened volatility, according to a quarterly report by Coinbase Institutional and on-chain analytics firm Glassnode. The Charting Crypto: 1Q 2026 analysis notes that excess leverage was largely flushed from the market during last year’s Q4 selloff, leaving Bitcoin less vulnerable to cascading liquidations and better positioned to absorb macroeconomic shocks. Rather than signaling the start of a renewed speculative rally, the researchers describe Bitcoin as a macro-sensitive asset shaped by global liquidity conditions, institutional positioning, and deliberate portfolio rebalancing.
The report frames the current environment as one in which durability matters more than speed, marking a shift away from earlier cycles dominated by retail momentum and leveraged trading. It points to a more disciplined market structure, supported by liquidity but constrained by defensive positioning from professional investors. “We believe that crypto markets are entering 2026 in a healthier state, with excess leverage having been flushed from the system in Q4,” the authors wrote, adding that “The macro environment looks sound, and monetary policy should be supportive.”
A key forward-looking indicator cited is Coinbase’s Global M2 Money Supply Index, which the firms say has historically led Bitcoin’s price by roughly 110 days and remains positively aligned with the current quarter, signaling near-term support. The report also notes that open interest in Bitcoin options has overtaken perpetual futures, with investors increasingly paying for downside protection rather than adding directional leverage—a sign hedging has replaced aggressive risk-taking. Bitcoin is up 1.2% on the day to $89,000 and remains flat over the past seven days, according to CoinGecko data.
On-chain data show a similar pattern, with Bitcoin activity picking up late last year as coins changed hands more quickly, while the share of long-held supply edged lower, indicating reallocations rather than exits. Investor sentiment has weakened since October, slipping from optimism to caution and remaining subdued, as reflected by unrealized gains and losses. Taken together, the signals suggest Bitcoin may be entering a phase defined by slower price discovery and tighter links to macroeconomic conditions. Still, the authors cautioned that a slowdown in liquidity growth, renewed inflationary pressures, or geopolitical shocks could test whether the market’s newfound stability holds.
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