• Institutional vs retail dynamics
• Stablecoins and liquidity
• Macro environment

Coinbase, the leading U.S. cryptocurrency exchange, has opined that the October sell-off wasn’t the end of the cycle, arguing that it may have been the reset that the market needed.

The exchange’s research arm has noted that excess leverage has been flushed, and fundamentals remain intact. Moreover, institutional players are quietly rotating back in. 

On top of that, smart money is clustering around EVM chains, RWAs, and yield protocols, which, as Coinbase noted, leads to selective re-risking.

According to Coinbase, crypto markets have likely found a bottom since leverage levels are now healthier.

The exchange's analysts expect a slow grind upward over the next few months instead of a parabolic rally.

Institutional vs retail dynamics

Institutional players stayed largely insulated and are expected to lead the next leg up.

Retail-heavy altcoins suffered the most, and Bitcoin and Ethereum will likely dominate near-term recovery.

The exchange predicts that Bitcoin dominance could rise over the next 2–3 months before another rotation into alts.

Stablecoins and liquidity

Stablecoin supply has not expanded significantly, which suggests that capital is rotating, not new money entering.

Rebounds depend on tactical incentives and narratives until liquidity broadens.

Macro environment

When it comes to the macro backdrop, Coinbase claims that it it remains remains complex but manageable:

Fed rate cuts and easing liquidity help crypto. Risks remain from trade tensions, fiscal deficits, and potential yield spikes.

At the same time, productivity growth (boosted by AI) could offset some macro volatility, keeping risk assets supported.

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