Coinbase Institutional Q4 Forecast: Key BTC, ETH, L2 Bullish and Bearish Trends
According to Coinbase Institutional’s recent report for Q4 2025, the outlook for cryptocurrencies remains cautiously optimistic. Titled “Charting Crypto: Navigating Uncertainty,” the report highlights important trends for Bitcoin (BTC), Ethereum (ETH), and Layer-2 (L2) networks. This analysis was conducted in collaboration with Glassnode.
Market Conditions and Liquidity
The report identifies market liquidity and macroeconomic factors as the central themes in its forecast. Coinbase links a recent price drop to a combination of heavy leverage and thin order books. This situation worsened due to auto-deleveraging by some exchanges, which drained market liquidity and capped short positions.
Despite these challenges, prices showed signs of stabilization over the weekend. However, Coinbase cautions that prevailing macroeconomic jitters continue to create a tentative environment for traders.
Money Supply and Economic Trends
- Coinbase’s Global M2 Money Supply Index started the quarter with positive signals, historically leading Bitcoin prices by approximately 110 days.
- There are expectations for two Federal Reserve rate cuts before the year concludes, potentially leading more capital to flow from money-market funds back into riskier assets.
On-Chain Activity and ETF Developments
The report underscores the increase in stablecoin supply and monthly transaction volumes. Coinbase interprets this as evidence of growing on-chain activity. The infrastructure for U.S. spot exchange-traded funds (ETFs) for both Bitcoin and Ethereum is also advancing, enhancing access for traditional investors and improving market depth.
Coinbase argues that these developments are essential for maintaining liquidity and usage amid market volatility, rather than merely being influenced by headline news.
Investment Sentiment and Positioning
In terms of positioning, Coinbase favors Bitcoin for its perceived status as “digital gold.” The report indicates that many investors continue to be bullish on BTC for the next three to six months, despite concerns regarding macroeconomic risks.
- Ethereum is also viewed positively due to its scaling progress and increasing on-chain activity.
- Layer-2 networks are experiencing more transactions as fees decrease and investor sentiment improves.
Institutional Involvement and Risks
Coinbase also discusses the role of Digital-Asset Treasury Companies (DATs), which are now recognized as significant, stable buyers of BTC and ETH. This group possesses a notable portion of the circulating supply and contributes to overall market demand.
Nonetheless, Coinbase acknowledges potential near-term risks, including uncertainties related to ongoing U.S. government shutdowns, possible liquidity declines in November, and the evolving dynamics surrounding DATs.
In summary, Coinbase Institutional concludes that despite these concerns, favorable liquidity conditions, supportive policies, and increasing on-chain activity contribute to a positive end-of-year outlook for cryptocurrencies—especially Bitcoin, which is positioned to lead the market if these favorable conditions continue to hold.
