In a recent analysis by Coinbase Institutional and Glassnode, positive shifts in sentiment surrounding Bitcoin suggest that a potential bottom may be forming in the cryptocurrency market. Following a period characterized by fear, investor sentiment has transitioned to a more optimistic outlook, with approximately 75% of surveyed institutional investors and 71% of non-institutional investors describing Bitcoin (BTC) as undervalued.
The insights come from the Q2 2026 Charting Crypto report, which emphasizes the influence of on-chain metrics alongside survey data. Notably, the Net Unrealized Profit and Loss metric for Bitcoin has moved beyond the fear zone, indicating a shift towards optimism as April concludes. This development suggests that many crypto assets could experience a rebound in the near term.
In tandem with Bitcoin’s recovery, Ethereum (ETH) is exhibiting similar patterns. The supply of short-term ETH—held for less than three months—decreased by 38% in the first quarter, while long-term holdings (over a year) increased by 1%. This trend indicates that speculators are exiting, while more committed investors are accumulating.
However, veteran analysts remain divided on the sustainability of this potential bottom. Willy Woo, a respected figure in on-chain analytics, believes that the current market conditions indicate a testing of the bottom. He suggests that Bitcoin’s recent investor cost basis is around $79,000, giving it only a 30% chance of breaking through in the current attempt. He stated, “BTC is currently attempting a bottom, but all the pieces are not yet in place; the next 3-6 weeks will be telling.” Woo argues that maintaining a price above $65,000 is crucial for establishing a more structural change in the market.
Conversely, crypto trader Ivan Liljeqvist, also known as Ivan on Tech, expresses skepticism about the bullish thesis. He points out that Bitcoin has yet to break its bull market support band or establish any decisive bullish signals, warning that the historical trend of May typically sees declines in bear cycles. Liljeqvist noted, “Bitcoin dumps hard each May in bear markets… do not be complacent here,” pointing to past May performances in 2018 and 2022, where Bitcoin experienced significant downturns of around 19% and 16%, respectively.
The discussion surrounding Bitcoin’s potential bottom is complicated by macroeconomic factors and ongoing tensions in the Middle East. Coinbase underscores the challenges of making short-term trading decisions given these variables, yet the firm considers the macroeconomic landscape to be relatively supportive of a near-term floor for Bitcoin.
Traders and investors are advised to remain cautious and manage risk appropriately while vigilantly monitoring key support levels and broader market indicators. The next few weeks will be critical in determining whether Bitcoin can sustain its price above the crucial $65,000 mark and whether the recent sentiment shift will translate into a lasting recovery. Failure to achieve these benchmarks may lead to further losses, reinforcing the skepticism around a May downturn.
