The recent decline in the cryptocurrency market has raised concerns about the potential onset of a new bear market, according to a report from Coinbase. The report highlights key technical indicators and market signals that suggest a prolonged downturn in digital assets, commonly referred to as a “crypto winter.”
The total crypto market cap, excluding Bitcoin, has dropped significantly since its peak in December 2024, falling by 41% to $950 billion as of mid-April. This decline has been accompanied by a reduction in venture capital investment, which remains down 50–60% from previous highs despite a slight recovery in early 2025.
In addition to these factors, broader macroeconomic challenges such as global tariffs, fiscal tightening, and a slump in equities have further contributed to the fragile outlook for the crypto market in the near term.
David Duong, Global Head of Research at Coinbase, highlighted the recent declines in Bitcoin and the COIN50 Index, both of which have fallen below their 200-day moving averages. This indicates a bearish cycle, with altcoins experiencing sharper losses than Bitcoin, increasing risk and volatility in the market.
The report argues that traditional definitions of bull and bear markets are inadequate for the crypto space, given the high levels of volatility. Alternative metrics such as risk-adjusted performance using standard deviations and the 200-day moving average trend offer a more nuanced view of market conditions.
While Coinbase recommends a defensive stance in the short term, particularly over the next four to six weeks, it remains cautiously optimistic about the second half of 2025. The market may find a bottom by the end of the second quarter, potentially leading to a stronger recovery in the third quarter.
The report also emphasizes the growing complexity of the crypto market, with sectors like DeFi, infrastructure tokens, and AI-driven agents expanding. As Bitcoin matures into a store-of-value asset, understanding the broader market requires more granular tools.
Despite the current challenges, Coinbase believes that the long-term fundamentals for crypto remain intact. However, until macroeconomic conditions stabilize and capital flows back into the space, volatility and caution are likely to prevail.
In conclusion, the crypto market is facing a period of uncertainty and volatility, with key technical indicators pointing towards a potential bear market. Investors are advised to exercise caution and remain vigilant in the face of market fluctuations.