Coinbase Institutional, in its latest market outlook, has characterized the recent October liquidation event as a "reset" rather than a collapse, suggesting that the market is now on a healthier footing and poised for a new uptrend.
The firm's analysts posit that the dramatic unwinding of leveraged positions in mid-October effectively cleansed the market of excessive speculation. With derivatives activity cooling and margin levels returning to what they describe as "pre-rally norms," a healthier structure is emerging, which could support a more sustainable recovery heading into 2025.
From Panic to Opportunity
The report highlights that the October 10 crash, while initially causing trader apprehension, served more as a cleansing process than a long-term setback. Coinbase summarized the event by stating, "The market reset, not broke." Instead of viewing it as an indicator of deeper structural weakness, the institution interprets the pullback as a necessary rebalancing after months of overheated trading.
Their analysts now anticipate a more tempered rise in digital assets, with Bitcoin expected to lead, rather than an immediate surge to new all-time highs. Based on derivatives data, they project that Bitcoin could trade within a range of $90,000 to $160,000 over the next few months, with a bias towards the upper end of this spectrum.
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
Macro Tailwinds Could Extend the Cycle
Coinbase's research team believes the medium-term outlook for the market remains favorable. They identify several macroeconomic drivers—anticipated Federal Reserve rate cuts, expanding liquidity conditions, and the development of clearer digital asset regulations—as potential catalysts that could prolong the market's growth phase into 2026.
The report suggests, "Rather than breaking the trend, October’s sell-off may have extended it. The correction allowed leverage to normalize, improving market resilience and setting the stage for gradual upside."
Institutions Stay Calm as Retail Feels the Pain
Retail-driven altcoins experienced the most significant impact during the liquidation event, with many smaller tokens losing double-digit percentages within hours. In contrast, institutional portfolios were largely insulated due to low leverage exposure and a greater allocation to Bitcoin and other large-cap assets.
Coinbase's findings align with data from Nansen, which indicates that professional investors, often referred to as "smart money," have recently concentrated their activity around Ethereum and Arbitrum. Solana and Binance Smart Chain, which previously saw significant speculative flows, have experienced fading momentum as capital has rotated towards ecosystems with deeper liquidity and stronger fundamentals.
Coinbase cautions that these portfolio shifts should not be interpreted as direct buy signals but rather as indicators of where sophisticated traders perceive relative stability.
A Slow but Stronger Climb Ahead
The report concludes that the next significant advance in the crypto market is likely to be institutionally driven. With leverage reset, healthier balance sheets, and a potentially easing macroeconomic backdrop, the firm anticipates the market to ascend gradually, supported by firmer structural underpinnings rather than speculative fervor.
"The recovery won’t be explosive," the authors note, "but it’s likely to be more durable."
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