Interest rate hikes and U.S. Treasury yields hitting new highs since 2002, yet Bitcoin has risen 43%; Glassnode and Coinbase believe the market has moved from bottoming to an initial recovery.
Author: Glassnode, Coinbase Institutional
Compiled by: Jiahuan, ChainCatcher
We hold a positive outlook for the crypto market in Q4 2026. Despite the Federal Reserve re-tightening policy, Bitcoin still rose 43% in Q3 to $83,600. This shows that the market shift toward accumulation we described last quarter has developed into an initial recovery.
The bigger variable lies in the policy pivot toward tightening. In September, the Federal Reserve raised rates by 25 basis points to a range of 3.75% to 4.00%, the first hike since July 2023, even as core CPI had fallen to 2.4%. The 10-year U.S. Treasury yield rose 85 basis points during the quarter to 5.29%, the highest since 2002. The market currently expects about 64 basis points of further hikes over the next six months. Even so, Bitcoin still outperformed gold and several equity markets, indicating that incremental demand is being driven by multiple factors, not just the liquidity factor that dominated the first half.
On-chain conditions have improved markedly. Entity-adjusted NUPL rose from 0.11 to 0.38, putting Bitcoin back into the "optimism/anxiety" range. The share of supply in profit rose from 46% to 71%, reclaiming the lower bound of its statistical range. Supply that has not moved for more than a year still increased by about 340,000 BTC, indicating that long-term holders largely continued to hold through this rally. MVRV stands at 1.56, with a realized price of about $53,600, indicating that valuations have normalized but are not yet close to levels seen at previous cycle tops.
Caution is still warranted. This rally has brought more coins back into circulation, with supply that has moved within the past three months increasing 16% to 2.8 million BTC. Long-term holders turned to slight net selling in August. About 1.7 million BTC last changed hands at prices between $89,600 and $93,700, forming a dense supply zone just above the current price.
The long-term factors supporting the market continue to expand. This quarter, ETH outperformed Bitcoin by about 20%, Ethereum DeFi total value locked (TVL) rose from $37 billion to $53 billion, and U.S. spot Bitcoin ETFs saw net inflows of $7 billion. These changes indicate that the foundation of institutional and on-chain demand is broadening, although short-term price action remains more susceptible to real yields and positioning than to long-term adoption trends.
To help investors navigate this environment, we are pleased to provide the latest market data and on-chain analysis to help investors better understand the trends currently shaping the market and how these trends may affect the crypto economy going forward. We hope this article helps you participate in the crypto market, and we welcome your feedback and questions.
Our overall market view
We are bullish on Q4 2026.
We hold a positive outlook for the crypto market in Q4 2026, because even with policy tightening, Bitcoin has moved from a bottoming phase into an initial recovery.
Bitcoin rose 43% in Q3 2026, outperforming gold and equities, despite the Federal Reserve rate hike and the 10-year U.S. Treasury yield rising to 5.29%.
U.S. spot Bitcoin ETFs saw net inflows of $7 billion in Q3 2026, reversing the outflows of the first half and pushing assets under management to $127 billion.
Although short-term signals warrant caution and a supply zone exists overhead near $90,000 to $94,000, we still view a pullback toward the 200-day moving average as an accumulation opportunity.
What would change our view
What would make us more optimistic:
If the Federal Reserve pauses after the September hike and the three-month annualized rate of core PCE holds at 2.1%, it would help ease pressure from real yields. A decisive breakout by Bitcoin above the $90,000 to $94,000 supply zone, continued ETF inflows, and continued token outflows from exchanges would all strengthen our confidence in a sustained uptrend.
What would make us more concerned:
If the 10-year U.S. Treasury yield rises further toward 5.5%, or oil prices hold near $90, keeping headline inflation elevated, the market could begin to price in more rate hikes and financial conditions would tighten accordingly. If price is rejected at the overhead supply zone and then falls below the 200-day moving average (currently about $71,000), accompanied by renewed sustained ETF outflows, it would indicate that the market recovery needs more time.
Total crypto market capitalization
In Q3 2026, total crypto market capitalization (excluding stablecoins) rose about 48% to $2.55 trillion. More than half of the increase occurred in the week of August 17, when Bitcoin rose 24%. Stablecoin supply remained essentially unchanged at $311 billion, still below the record $321 billion set in May. As a result, stablecoins' share of market capitalization fell from about 15% to 11%. This reflects rising crypto asset prices rather than a contraction in stablecoin supply.
Chart: Total crypto market capitalization
BTC price performance since cycle low
Bitcoin has now experienced four full cycles, each containing a bull market and a bear market (the chart does not show the cycle from genesis to 2011). The current cycle began in 2022, and price performance in the first two years closely resembled the 2015-2018 cycle, but began to diverge in Q1 2025 as some market participants, mainly long-term holders, reduced risk exposure.
The current cycle has lasted more than 46 months, and the top appears to have formed in October 2025 at 7.9x the cycle low. In Q3 2026, Bitcoin recovered from 3.8x to 5.4x the cycle low, suggesting the post-peak low may have already occurred, though it remains unclear whether these historical patterns still apply.
Past performance does not guarantee future results.
Chart: Comparing Bitcoin's price multiple and duration since cycle low across different cycles.
ETH price performance since cycle low
Ether has experienced at least two full cycles, each containing a bull market and a bear market. The current market cycle officially began in 2022, and its first two years tracked the 2018-2022 cycle, but it has since diverged significantly from the previous cycle.
The current cycle has lasted more than 46 months. In Q3 2026, Ether recovered from 1.4x to 2.4x its November 2022 low, outperforming Bitcoin by about 20%. However, after the rebound, ETH remains well below the 4.4x cycle high and is markedly off the trajectory of the 2018-2022 cycle, which had reached 17.3x its low at the same stage. This divergence is consistent with a maturing market structure: returns increasingly depend on real utility, regulatory clarity, and genuine adoption, rather than the speculative surges prevalent in earlier cycles.
Past performance does not guarantee future results.
Chart: Comparing Ether's price multiple since cycle low across the 2015-2018, 2018-2022, and 2022-starting cycles.
Correlation matrix
Outside crypto assets, Bitcoin's price action in Q3 2026 was closest to precious metals. Its daily return correlation with gold and silver was 0.61 each, and its correlation with the U.S. dollar index was -0.43. Bitcoin's correlation with U.S. equities was relatively low: 0.30 with the S&P 500 and 0.29 with the Nasdaq; its correlation with 2-year and 10-year U.S. Treasury yields was negative. These relationships suggest the rally was driven more by demand for dollar alternative assets than by a broad risk-on revival. This is also consistent with Bitcoin's strong performance relative to U.S. Treasuries when Treasury yields rose.
Chart: Return correlation matrix for crypto assets, equities, precious metals, the dollar, Treasury yields, and other assets and indicators.
Volatility and rolling correlations
Chart: 90-day annualized realized volatility for BTC, ETH, and SOL, calculated on a three-month rolling window.
Chart: 90-day rolling correlation of BTC with the S&P 500 and gold, calculated on a three-month rolling window.
Spot ETF fund flows,
Chart: 7-day cumulative net inflows and assets under management (AUM) for U.S. spot Bitcoin ETFs.Chart: 7-day cumulative net inflows and assets under management (AUM) of U.S. spot Ether ETFs.
Stablecoins
Chart: Total stablecoin supply and its 30-day rate of change, distinguishing positive and negative growth.
Chart: Adjusted stablecoin transfer volume.
Bitcoin
Bitcoin (BTC) is the world's first widely adopted cryptocurrency. A distinction must be made between "bitcoin" as a token and the "Bitcoin" network that carries its transactions. The network uses a blockchain to enable secure, seamless peer-to-peer transactions over the internet. The Bitcoin blockchain is a public ledger containing the history of all bitcoin transactions. BTC is decentralized: two people anywhere in the world can send bitcoin to each other without going through a bank, government, or other institution.
Developer: Bitcoin was created by Satoshi Nakamoto. Satoshi Nakamoto is a pseudonym used by an individual or team that set out the technology in a 2008 white paper.
Reference price: Bitcoin Reference Rate (BRR), CME CF Benchmark Reference Rate
Bloomberg ticker: XBT Currency
Circulating supply: 20.09 million coins
Share of circulating supply: 95.7%
Inflation rate: 0.8%
Bitcoin: Key Takeaways
In Q3 2026, bitcoin derivatives open interest rose 36% to about $80 billion, driven mainly by options. Meanwhile, the annualized basis on CME futures widened from about 4% to 6%. Open interest rebounded alongside rising prices but remained below the peak of about $114 billion in October 2025.
Entity-adjusted net unrealized profit/loss (NUPL) shows that BTC market sentiment gradually recovered in Q3 2026. The metric rose from 0.11 to 0.38, re-entering the "optimism/anxiety" zone from the "hope/fear" zone. However, it remains clearly below the 0.48 threshold of the "belief/denial" zone, indicating that sentiment has normalized but is not yet overheated.
Although bitcoin rose 43% in Q3 2026, coins that had not moved for more than a year still increased by about 340,000 BTC. Meanwhile, coins that moved within the past three months increased 16% after touching their lowest level since late 2023 in July. This combination suggests that long-term holders largely continued to hold through the rally, while newer market participants began to return.
BTC Indicator Map
This map screens 533 on-chain and macro indicator series for their relationship with bitcoin's subsequent 30-day return. Only indicators that simultaneously meet the following conditions are displayed: they pass a significance test after multiple-comparison correction; their current value is far enough from their own median to be testable; and the signal direction is consistent with their historical relationship. Square size indicates the confidence level of this relationship, while color and number indicate the difference in the implied next-30-day return relative to the usual level, in percentage points.
As of September 30, 41 of the 533 indicators passed the above tests, of which 27 point to below-usual returns over the next 30 days. Macro indicators are slightly positive overall: bitcoin's strength relative to small-cap stocks, long-term U.S. Treasuries, and gold is partly offset by its distance from 52-week highs relative to the U.S. dollar and emerging markets. On-chain indicators are more clearly weak, with 8 of 9 pointing to below-usual returns after the Q3 rally.
The combination of these signals is more suggestive of short-term consolidation than a trend reversal. Among on-chain indicators, the largest drags come from the share of supply in profit, the ratio of open interest to market cap, and on-chain volume on up days being weaker than on down days.
Chart: BTC indicator map, divided into 9 groups of on-chain indicators and 32 groups of macro indicators; green indicates expected 30-day return above the usual level, red indicates below the usual level.
BTC Support and Resistance Levels
This heatmap marks support and resistance levels based on confirmed price turning points in 4-hour candles. The trading volume at each turning point is allocated to a narrow price range, given higher weight before price retests that level, and gradually decays over time. Therefore, darker-colored ranges represent more important price levels in the market. Blue indicates support below the current price, and gray indicates resistance above the current price.
At the end of Q3 2026, bitcoin's price was about $83,600. The nearest resistance is at $87,000 to $87,800, the zone that capped the September high; slightly higher, around $90,000 to $94,000, there is denser cost supply. The strongest support zone below is at $74,500 to $75,200, slightly above short-term holders' cost basis of $73,500; the 200-day moving average at about $71,200 provides a second layer of support.
This distribution suggests that if price falls back to the low $70,000s, it will encounter multiple overlapping support levels. This is consistent with our view of that area as an accumulation opportunity. A deeper support level remains near $58,000, where the quarter's low was located.
Chart: BTC support and resistance heatmap, overlaid with the 50-day moving average, 200-day moving average, and short-term holder cost.
BTC Entity-Adjusted Net Unrealized Profit/Loss (NUPL)
Net unrealized profit/loss (NUPL) is the difference between relative unrealized profit and relative unrealized loss. The zones in the chart are used to reflect investor sentiment from different perspectives. Because markets are difficult to predict, each phase is described with two words of opposite meaning. These phases follow the traditional market cycle: when the market recovers from a deep bear market, it often passes through "capitulation → hope → optimism → belief → euphoria" in sequence; and when entering a bear market after setting an all-time high, it may pass through "greed → denial → anxiety → fear → capitulation" in sequence.
Entity-adjusted NUPL is an improved version of NUPL that excludes transactions between different addresses of the same entity, i.e., "internal transactions." Therefore, entity-adjusted NUPL counts only real economic activity and provides a better market signal than the unadjusted, UTXO-based version.
As prices rose, investor sentiment gradually recovered in Q3 2026. NUPL rose from 0.11 to 0.38, returning from the "hope/fear" zone to the "optimism/anxiety" zone, but remained clearly below the "belief/denial" threshold.
Chart: Entity-adjusted BTC net unrealized profit/loss and BTC price, with different sentiment zones marked.
BTC Realized Price and MVRV
Realized price (or "on-chain cost basis") values each bitcoin at the price on the day of its last on-chain transaction, calculating the average price of all bitcoin supply.
The MVRV ratio compares market value (spot price) with realized value (realized price) and is used to measure the multiple of investors' unrealized profit or loss:
MVRV at 2.0: price is 2x the average cost (the average holder's return is 2x).
MVRV at 1.0: price equals the average cost (the average holder is at break-even).
MVRV at 0.85: price is 15% below the average cost (the average holder is down 15%).
Extreme MVRV values help identify when the market is overheated or undervalued, and when investors' profit levels deviate significantly from the average.
In Q3 2026, as prices recovered, MVRV rose from 1.10 to 1.56 but remained below its median of 1.76 since 2020.
Chart: BTC spot price, realized price, and MVRV ratio.
Profitability Status of BTC Supply
This chart shows the share of total BTC supply that is in profit, with two statistical lines set at plus and minus 1 standard deviation. They represent important warning and accumulation zones, respectively. This indicator helps understand investors' position status and assess when most of the supply is in profit or loss.
In Q3 2026, the indicator rose from 46% to 71%, moving back above the minus 1 standard deviation line and leaving the historical accumulation zone, but remained clearly below the 91% warning line.
Chart: Share of BTC supply in profit, plus 1 standard deviation warning line, minus 1 standard deviation accumulation line, and BTC price.
BTC Dormant Supply and Active Supply
This chart compares the circulating BTC supply that has not moved for at least one year with the circulating BTC supply that has been active within a short period (less than three months).The amount of BTC that last moved within the past three months rose 16% in Q3 2026, after touching its lowest level since late 2023 in July. This increase returned some of the supply to circulation. Meanwhile, supply that has not moved for more than a year still increased by about 340,000 BTC, indicating that long-term holders largely continued to hold during the rally.
Chart: BTC supply that has not moved for more than a year, BTC supply that has moved within the past three months, and BTC price.
BTC Puell Multiple (30-day average)
The Puell Multiple is a foundational on-chain metric widely used in Bitcoin analysis to gauge the asset's valuation relative to mining fundamentals. Specifically, it is calculated by dividing the USD value of daily BTC issuance by the 365-day moving average of that daily issuance value.
This calculation helps determine whether Bitcoin's price is significantly oversold or overbought, especially when compared with historical average mining revenue. It reflects miners' selling pressure and revenue conditions relative to historical norms.
In Q3 2026, the Puell Multiple recovered from 0.67 to 1.02, moving back above the declining annual average of 0.83, indicating that miner revenue had returned to around the usual level of the past year as prices rose.
Chart: 30-day rolling average of the BTC Puell Multiple, the annual average, and BTC price.
BTC Long-Term Holder Net Position Change
This chart compares the net position change of long-term holders (LTHs, holding for 155 days or more) with the net position change on exchanges. We believe that rising long-term holder positions alongside falling exchange positions may indicate that investors are actively accumulating.
Applying this framework to Q3 2026 shows that long-term holders continued to accumulate in July, but around the August price breakout, they turned to slight net selling as coins flowed back into exchanges. In September, both trends reversed: the net position change of long-term holders turned positive again, while exchange balances began to decline.
Chart: 30-day net change in long-term holder positions and exchange positions, overlaid with BTC price.
BTC Derivatives Market
Chart: Monthly BTC spot, perpetual futures, dated futures, and options trading volume.
Chart: USD notional value of open interest in BTC perpetual futures, dated futures, and options.
Ethereum
Ethereum is an open-source blockchain platform on which developers can run decentralized applications (dApps) and create and deploy smart contracts. Ether (ETH) is the native cryptocurrency of the Ethereum network, with the second-largest market capitalization among all cryptocurrencies, after Bitcoin.
Developers: Ethereum was conceived by Vitalik Buterin, who published the whitepaper in 2014 and launched the project in 2015. Co-founders include Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin.
Reference price: Ether reference rate (ETHUSD_RR), CME CF Benchmark Reference Rate
Bloomberg ticker: XET Currency
Circulating supply: 122.2 million
DeFi total value locked: $53.3 billion
Inflation rate: 0.88%
Ethereum: Key Takeaways
In Q3 2026, the supply of ETH that has not moved for more than a year increased 7% to 66.7 million, while tokens that last moved within the past three months decreased 18% to 11 million. This indicates that holders largely continued to hold during the rally rather than selling into it.
As ether rose 71% in Q3 2026, Net Unrealized Profit/Loss (NUPL), a measure of ETH market sentiment, recovered from -0.31 to 0.22, moving the metric out of the "Capitulation" zone and into the "Optimism/Anxiety" zone. MVRV rose from 0.70 to 1.19, putting the average holder back in profit for the first time since May.
In Q3 2026, Ethereum DeFi TVL rose from $37 billion to $53 billion. After declining for a year, the share of stablecoin value held on L2s began to recover. U.S. spot ether ETFs saw net inflows of $3.1 billion in the quarter, reversing the outflows of the first half, and assets under management rose from $10.6 billion to $21.6 billion. In September, L2 fees increased significantly, driven mainly by a surge in activity on Robinhood's layer-2 network in the first week of the month. Taken together, these data indicate that ecosystem participation broadened as prices recovered.
ETH Support and Resistance Levels
This heatmap marks support and resistance levels based on confirmed price turning points in 4-hour candles. The trading volume at each turning point is assigned to a narrow price range, given higher weight before the price retests that level, and gradually decays over time. Therefore, darker-colored ranges represent more important price levels in the market. Blue indicates support below the current price, and gray indicates resistance above the current price.
At the end of Q3 2026, ether was priced at about $2,685, just below the $2,685-$2,695 resistance zone and slightly above the $2,640-$2,685 support zone. After the August breakout, the price entered a narrow, densely traded range. The strongest support zone further below is at $2,335-$2,380, followed by the market cost basis at about $2,265 and the 200-day moving average at about $2,105.
The low of about $2,355 on September 2 fell within this support zone, and ether remained above that area for the rest of the month. This resilience contrasts with the first half, when the price spent most of its time below the market cost basis. The quarterly high of about $2,800 remains the level that needs to be broken.
Chart: ETH support and resistance heatmap, overlaid with the 50-day moving average, the 200-day moving average, and the market cost basis.
ETH Net Unrealized Profit/Loss (NUPL)
This chart measures investor sentiment through Net Unrealized Profit/Loss (NUPL). The metric is the difference between relative unrealized profit and relative unrealized loss. The zones in the chart are used to reflect investor sentiment from different perspectives. Because markets are difficult to predict, each phase is described with two words of opposite meaning. These phases follow the traditional market cycle: when the market recovers from a deep bear market, it often passes through "Capitulation → Hope → Optimism → Belief → Euphoria" in sequence; and when a bear market begins after a new all-time high, it may pass through "Greed → Denial → Anxiety → Fear → Capitulation" in sequence.
In Q3 2026, ether rose 71%, ETH recovered from the "Capitulation" phase, NUPL rose from -0.31 to 0.22, and by the end of the quarter, the average holder was back in profit.
Chart: ETH Net Unrealized Profit/Loss and ETH price, with different sentiment zones marked.
ETH Realized Price and MVRV
Realized price (or "on-chain cost basis") values each ether at the price on the day of its last on-chain transaction and calculates the average price of the entire ether supply.
The MVRV ratio compares market value (spot price) with realized value (realized price) and is used to measure the multiple of investors' unrealized profit or loss:
MVRV of 2.0: price is 2x the average cost (the average holder's return is 2x).
MVRV of 1.0: price equals the average cost (the average holder is at breakeven).
MVRV of 0.85: price is 15% below the average cost (the average holder is down 15%).
Extreme MVRV values help identify when the market is overheated or undervalued, and when investors' profit levels deviate significantly from the average.
In Q3 2026, ether rose 71%, and MVRV rose from 0.70 to 1.19, putting the average holder back in profit for the first time since May. MVRV remains below its median of 1.3 since 2020, indicating that valuation remains moderate despite the price increase.
Chart: ETH spot price, realized price, and MVRV ratio.
Profitability Status of ETH Supply
This chart shows the share of total ETH supply that is in profit, with two statistical lines set at plus and minus 1 standard deviation. They represent important warning and accumulation zones, respectively. This metric helps understand investors' position status and assess the periods in which most of the supply is in profit or loss.In the third quarter of 2026, the indicator rose from 28% to 63%, re-crossing the negative 1 standard deviation threshold and exiting the historical accumulation zone, yet it remained significantly below the 87% warning line.
Chart: Share of ETH in profit, positive 1 standard deviation warning line, negative 1 standard deviation accumulation line, and ETH price.
ETH dormant supply and active supply
This chart compares the circulating ETH supply that has not moved for at least one year with the circulating ETH supply that has been active within a short period (less than three months).
In the third quarter of 2026, the ETH supply that had not moved for more than one year increased by 7%, while tokens that last moved within the past three months decreased by 18% to 11 million. This indicates that holders largely continued to hold during the rally rather than selling into it.
Chart: ETH supply that has not moved for more than one year, ETH supply that has moved within the past three months, and ETH price.
ETH derivatives market
Chart: Monthly ETH spot, perpetual contract, term futures, and options trading volume.
Chart: USD notional value of open interest in ETH perpetual contracts, term futures, and options.
L2 vs. Ethereum mainnet
Chart: Ratio of daily active addresses on L2 relative to the Ethereum mainnet, and stablecoin market cap ratio; a declining ratio means activity and stablecoin liquidity are shifting from L2 to the Ethereum mainnet.
Chart: User fees in ETH terms on Ethereum, Base, Robinhood, Polygon, Arbitrum, and other networks.