Coinbase Institutional and Glassnode said in their joint market report for the third quarter of 2026 that they continue to hold a neutral outlook on the cryptocurrency market.

The report said total cryptocurrency market capitalization, excluding stablecoins, fell by approximately 12% in the second quarter of the year. At the same time, stablecoin supply rose to an all-time high, a sign that more liquidity is being held by investors outside the broader crypto market. Stablecoins are often used as settlement and parking assets within crypto markets, so changes in their supply can help indicate whether capital is being deployed into risk assets or kept on the sidelines.

The firms said on-chain data indicates that Bitcoin may be moving from a correction and rebalancing phase into a period of accumulation. According to the report, Bitcoin valuations remain under pressure, recently moved supply has declined to its lowest levels in several years, and the share of Bitcoin supply in profit has fallen below its historical low. These indicators are closely watched because they can show how much supply is actively changing hands and whether holders are selling into strength or retaining coins during weaker conditions.

Coinbase Institutional and Glassnode noted that similar conditions have historically been associated more often with accumulation phases than with distribution phases.

The report also said macroeconomic liquidity conditions remain tight. It cited the hawkish monetary policy stance of the U.S. Federal Reserve under Kevin Warsh and the relative strength of the dollar as factors that continue to weigh on risky assets. For crypto markets, tighter liquidity can matter because Bitcoin, Ether, and other digital assets often compete with higher-yielding cash and dollar assets when investors reduce exposure to risk.

Other constraints on the market outlook include geopolitical risks, possible selling pressure from digital asset treasuries, and net outflows from Bitcoin and Ethereum spot ETFs during the first half of the year. Although the pace of ETF outflows has reportedly slowed recently, the report said the broader market environment remains cautious. Fund flows remain an important area to monitor because spot ETFs have become one of the main regulated channels for institutional and brokerage-accessible exposure to major crypto assets.

According to Coinbase Institutional and Glassnode, Bitcoin’s on-chain indicators are producing positive signals for long-term investors, but a stronger upward trend would require a significant improvement in global liquidity conditions.