After weeks of turbulence, Coinbase Institutional says the crypto market may have quietly found its footing.
In its latest outlook, the firm described the recent sell-off and wave of liquidations as a “reset” rather than a collapse — suggesting that the foundation for a new uptrend could already be forming beneath the surface.
Analysts at Coinbase argue that the dramatic unwinding of leveraged positions in mid-October effectively purged the market of excess speculation. With derivatives activity cooling and margin levels returning to what they called “pre-rally norms,” they believe a healthier structure is emerging — one that could support a more sustainable recovery heading into 2025.
The report points out that while the October 10 crash initially spooked traders, the event acted more like a cleansing process than a long-term setback. “The market reset, not broke,” Coinbase summarized. Rather than viewing it as a signal of deeper structural weakness, the institution interprets the pullback as a necessary rebalancing after months of overheated trading.
Their analysts now expect a more tempered rise in digital assets, led by Bitcoin, instead of a rapid surge to new all-time highs. Based on derivatives data, they estimate the world’s largest cryptocurrency could fluctuate between $90,000 and $160,000 over the next few months, with the probability skewed toward the upper end of that range.
October’s sell-off wasn’t the end of the cycle — it may have been the reset it needed.
Excess leverage is flushed, fundamentals remain intact, and institutional players are quietly rotating back in. Smart money is clustering around EVM chains, RWAs, and yield protocols — pointing to… pic.twitter.com/DUYqM36u8j
— Coinbase Institutional 🛡️ (@CoinbaseInsto) November 7, 2025
Coinbase’s research team believes the medium-term setup remains favorable. They highlight several macroeconomic drivers — anticipated Federal Reserve rate cuts, expanding liquidity conditions, and the rollout of clearer digital asset regulations — as potential catalysts that could keep the market’s growth phase alive into 2026.
“Rather than breaking the trend, October’s sell-off may have extended it,” the report suggests. “The correction allowed leverage to normalize, improving market resilience and setting the stage for gradual upside.”
Retail-driven altcoins took the hardest hit during the liquidation storm, with many smaller tokens shedding double-digit percentages in hours. In contrast, institutional portfolios remained largely insulated thanks to low leverage exposure and heavier weighting in Bitcoin and other large-cap assets.
Coinbase’s findings echo data from Nansen, which shows that professional investors — often referred to as “smart money” — have been concentrating activity around Ethereum and Arbitrum lately. Solana and Binance Smart Chain, once buzzing with speculative flows, have seen momentum fade as capital rotates toward ecosystems with deeper liquidity and stronger fundamentals.
Still, Coinbase cautions that these portfolio shifts aren’t buy signals in themselves but rather markers of where sophisticated traders see relative stability.
The report concludes that the next major advance in the crypto market will likely be institutional in nature. With leverage reset, balance sheets healthier, and the macro backdrop potentially easing, the firm expects the market to build upward gradually — this time with firmer structural support rather than speculative euphoria.
“The recovery won’t be explosive,” the authors note, “but it’s likely to be more durable.”
