The sharp drop in cryptographic assessments and ventilation of key technical indicators can point out the start of a new lower market for digital assets, according to a new Coinbase report.
In its Monthly Outlook report in April, the Crypto Exchange warned that the market signals are increasingly pointing out what many in industry call a “crypto winter”, a prolonged slowdown marked by the drop in prices, the reduction in the liquidity and the enthusiasm of the investors.
The total crypto market capitalization, excluding Bitcoin (BTC), plunged 41% since it reached a peak of $ 1.6 billion in December 2024. In mid-April, it is now at 950 billion dollars, below the levels seen during most of 2022.
The decrease coincides with a lively withdrawal of venture capital investment, which remains down 50 to 60% compared to its heights of 2021-2022 despite a modest recovery at the beginning of 2025.
Combined with broader macroeconomic challenges, including global prices, a budgetary tightening and collapsed actions, short -term crypto prospects remain fragile, according to the report.
Technical analysis
According to David Duong, a global research manager at Coinbase, recent drops in Bitcoin and the Coin50 index, the latter representing the 50 largest non-bitcoin cryptocurrencies, are not only routine volatility.
The two broke below their 200 -day mobile averages, a largely recognized technical indicator used to assess the long -term momentum of the market. Duong wrote:
“This trip below 200DMA suggests that we are entering a lower cycle. Although Bitcoin has decreased less than 20% compared to its recent summit, the wider Altcoin market has undergone much sharper losses, stressing the increase in risk and volatility further in the cryptographic risk curve. ”
The report argued that traditional definitions of bulls and bear markets, such as the 20% threshold commonly used on the stock markets, are too simplistic for cryptographic space. Digital assets often swing by 20% or more in a few days, alternative measures are necessary to assess real market conditions.
The company promotes two measures in particular: risk-adjusted performance by using standard deviations (or Z scores) and the 200DMA trend. These tools offer a more nuanced vision, reflecting not only price reductions, but also momentum changes and changes in investor psychology.
The analysis has shown that the recent drop in Bitcoin represents a type of difference of 1.4 below its historic standard, comparable to the scale of stock market corrections on the previous bears markets.
At the same time, the Coin50 index has been in the bears territory since the end of February, strengthening the concerns about the health of the wider cryptography ecosystem.
Prudent perspectives
While Coinbase advises a short -term defensive position, especially in the next four to six weeks, it remains cautiously optimistic about the second half of 2025.
The report suggests that the market could find a background by the end of the second quarter, potentially opening the way to a stronger recovery in the third quarter.
Duong noted:
“The feeling can change crypto quickly once macro pressures facilitate. But for the moment, the environment is calling for discipline and selectivity.”
The report also highlighted the growing complexity of the cryptography market, arguing that Bitcoin can no longer serve as a simple proxy for all space.
While sectors like DEFI, infrastructure tokens (backdrop) and AI agents develop, the divergence of performance and risk is increasingly pronounced.
According to the report:
“While Bitcoin ripens in a value store asset, understanding the wider market requires more granular tools. The days of treatment of the cryptography market as a monolith are finished. ”
Despite the challenges, Coinbase believes that the long -term fundamentals of the crypto remain intact. However, until macroeconomic conditions stabilize and capital begins to return to space, volatility and prudence are likely to dominate.
