A new Coinbase Institutional research report reveals that 67% of institutional investors anticipate a major Bitcoin rally within the next 3-6 months heading into 2026.
This bullish sentiment comes at a critical moment, when Bitcoin funding rates are flashing negative, and $7 trillion sits idle in money market funds, waiting for the right signal.
David Duong, head of research at Coinbase Institutional, noted that among 124 respondents from a joint Coinbase Institutional and Glassnode survey,” 67% of institutional investors and 62% of non-institutional investors maintain a bullish outlook for BTC over the coming 3-6 months.”
Source: CoinbaseHowever, both institutional (38%) and non-institutional (29%) investors identify the macro environment as the primary tail risk for crypto markets in the next 3-6 months.
Mega Bitcoin Rally Backed By DATs and Macro Easing
While the firm held an optimistic view entering Q4, the leverage flush on October 10 prompted them to recommend caution.
Still, Duong stated they expect continued crypto support from strong liquidity, a favorable macroeconomic backdrop, and positive regulatory developments.
“Bitcoin, in particular, may outperform market expectations driven by macro tailwinds.”
Opinions differ on where Coinbase respondents stand in the market cycle.
Nearly half (45%) of institutions believe we’re in a late-stage bull market, compared to just over one-quarter (27%) of non-institutions.
Source: CoinbaseCoinbase, however, anticipates the Federal Reserve will deliver two more rate cuts this quarter, which could encourage investors to deploy some of the $7 trillion currently sitting in money market funds.
The Glassnode Analyst Team highlighted the impact digital asset treasury companies (DATs) are having in supporting a potential crypto rally.
Bitcoin DATs now control approximately 3.5% of the token’s circulating supply, while leading ETH-focused DATs own 3.7% of ether’s supply.
Although most DAT valuations have dropped recently, “we believe DATs will continue to provide a meaningful source of demand in the quarter ahead,” Duong said.
Coinbase’s custom Global M2 Money Supply Index, an optimized blend of money-supply growth that leads Bitcoin by 110 days, now shows roughly 0.9 correlation with BTC’s movements.
The research shows that Bitcoin’s correlation with US stocks decreased from 0.55 to 0.40 in Q3, while its correlation with gold flipped from -0.09 to 0.23.
Similarly Bitcoin’s MVRV value currently sits at 0.85, meaning the current price is 15% below the market average cost basis.
Bitcoin Could See a $113K Short Squeeze
Bitcoin is now attempting to recover this deficit before resuming its rally.
When a correction ends, the market often enters a phase of disbelief, when investors struggle to believe the trend could turn bullish again.
This behavior is particularly visible in derivatives markets through BTC funding rates.
CryptoQuant analysts observed that on Binance, funding rates remain negative, a clear sign that short positions dominate.
Over the past week, funding rates stayed negative six out of seven days, hovering around -0.004%.
This stems from the October 10 liquidation event that severely shook trader confidence.
But paradoxically, the longer this disbelief persists, the stronger the potential for an explosive upward move.
If the uptrend continues, the growing accumulation of short positions could fuel the next leg higher.
As these shorts get liquidated, prices would surge, triggering a short squeeze.
“In such a scenario, the rally could quickly extend toward major liquidity zones around $113,000, and potentially up to the $126,000 region, both levels where substantial short order liquidations are clustered,” CryptoQuant analyst Darkfost added.
This pattern unfolded recently in September 2024, when BTC dropped to $54,000 before rebounding past $100,000 for the first time, and in April 2025, when BTC rallied from $85,000 to $111,000, then to $123,000.
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