Bitcoin’s resilience in the face of rising interest rates is increasingly tied to its role as a hedge against the US dollar, according to a joint report released October 15, 2026, by Coinbase and Glassnode. The data suggests that institutional appetite and long-term holder behavior are overriding traditional market headwinds.
Macroeconomic Shifts and Dollar Alternatives
The third quarter of 2026 presented a challenging environment for risk assets. In September, the Federal Reserve raised the policy rate by 25 basis points to a range of 3.75% to 4.00%. Simultaneously, the US 10-year Treasury yield climbed 85 basis points to reach 5.29%, a level not seen since 2002.
Despite these pressures, Bitcoin maintained a distinct performance profile. According to the Coinbase and Glassnode report, Bitcoin showed a high positive correlation of 0.61 with precious metals, while maintaining a negative correlation of -0.43 with the US Dollar Index. Analysts noted that Bitcoin’s 43% price increase during the third quarter, which saw the asset reach $83,600, was likely driven by capital inflows seeking a US dollar alternative and an inflation hedge rather than typical stock market risk-on sentiment.
On-Chain Data and Institutional Demand
The shift in market sentiment is reflected in on-chain metrics. The entity-adjusted unrealized profit/loss ratio (NUPL) climbed from 0.11 to 0.38, moving the market into what the report categorizes as an optimism phase. This indicator suggests a recovery from the previous bear market cycle.
Long-term holders remain a primary driver of this stability. Data shows that supply unmoved for over a year increased by approximately 340,000 BTC, signaling that these investors held their positions despite the recent price gains. Institutional interest further supported this trend, with US spot Bitcoin ETFs recording $7 billion in net inflows during the third quarter.
Looking Toward Year-End Hurdles
While the broader trend remains positive, the report identifies specific technical hurdles for the final quarter of 2026. Investors will note that the recent rally has led to increased token circulation, with supply moved in the last three months rising by 16% to 2.8 million BTC.
The figure that matters for near-term price action is the dense supply zone located between $89,600 and $93,700. Approximately 1.7 million BTC were last traded within this range, potentially creating resistance as the market approaches the $90,000 threshold. The bottom line for the remainder of the year is that while the foundation of institutional and on-chain demand is expanding, short-term price movements will likely remain sensitive to real yields and market positioning.
The report from Coinbase and Glassnode serves as a reminder that while long-term adoption trends are expanding, the market must still navigate the impact of ongoing Federal Reserve policy shifts. Investors should consult their financial advisors when evaluating how these macroeconomic factors align with their personal risk tolerance.
Ethereum Performance and DeFi Growth
The joint report from Coinbase and Glassnode highlights that Ethereum demonstrated significant strength alongside Bitcoin during the third quarter of 2026. Ethereum outperformed Bitcoin by approximately 20% during this period. On-chain metrics for the asset showed a sharp recovery, with the unrealized profit/loss ratio climbing from -0.31, categorized as capitulation, to 0.22, which the report identifies as the optimism zone. Furthermore, the percentage of Ethereum in profit expanded from 28% to 63%.
Institutional interest in Ethereum mirrored the broader market trend, with spot ETH ETFs recording $3.1 billion in net inflows. The ecosystem also saw robust activity in decentralized finance, as the total locked value (TVL) in Ethereum DeFi rose from $37 billion to $53 billion. According to the report, supply dormant for over a year reached 66.7 million ETH, representing the majority of the total supply, which reinforces the trend of long-term holder accumulation observed across the digital asset space.
Sources
- [Cryptocurrency] Cryptocurrency market expected to recover toward year-end ── Coinbase x Glassnode Q4 Report: BTC 'breaking $90,000' and 'demand for US dollar alternatives' are the focus｜今岡陵
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Photo: Steve Jurvetson from Los Altos, USA (CC BY 2.0)
