- Bitcoin and COIN50 fall beneath 200-day shifting averages.
- Venture capital stays 60% beneath 2021 ranges regardless of gentle rebound.
- Market could stabilise between mid and late Q2 2025, says Coinbase.
The danger of a renewed crypto winter is rising, Coinbase Research warned this week, as key technical and macroeconomic indicators recommend the digital asset market could also be getting into one other extended downturn.
In a note published yesterday, Coinbase stated Bitcoin has slipped beneath its 200-day shifting common—a stage extensively seen as a bearish sign.
The COIN50 index, which tracks the highest non-Bitcoin belongings on the platform, has additionally fallen beneath its long-term help.
Adding to the market stress are surging world tariffs and extended fiscal tightening, each of that are weighing on investor sentiment and curbing inflows into crypto.
The state of affairs echoes the 2022 crash, when over $2 trillion in market worth was worn out inside 18 months.
Altcoins have been hit the toughest. Excluding Bitcoin, the overall crypto market cap has dropped 41% since its December 2024 peak, falling to $950 billion.
That determine is decrease than any stage recorded between August 2021 and April 2022, a time when market turbulence was already excessive.
Altcoins fall 41%
According to Coinbase, the sustained drawdown in altcoins highlights the weakening urge for food for riskier crypto investments.
Tokens outdoors the Bitcoin ecosystem have seen sharp sell-offs amid skinny liquidity and a scarcity of recent capital.
The COIN50 index now trades nicely beneath its 200-day common, signalling broad technical weak spot throughout the sector.
Retail curiosity has additionally declined, whereas institutional flows stay restricted. This means that the bullish momentum seen in late 2024 has largely dissipated.
Many smaller initiatives are underperforming, notably these in area of interest segments reminiscent of decentralised AI, Web3 gaming, and tokenised real-world belongings.
Funding stays low
Coinbase’s report additionally factors to stagnation in enterprise capital. Although funding volumes have picked up modestly since late 2024, they continue to be 50% to 60% beneath the highs recorded in the course of the 2021–2022 cycle.
This has left many early-stage startups with out the runway to scale, pushing some to pause improvement or downsize operations.
The absence of contemporary capital has slowed innovation throughout key verticals.
Many within the business had anticipated decentralised finance, metaverse functions, and crypto crowdfunding fashions to steer the subsequent bull cycle. Instead, these areas have stalled.
Macro weighs on sentiment
Coinbase cited exterior financial pressures as a serious motive for the latest stoop.
Tighter financial coverage, excessive rates of interest, and the escalation of worldwide tariffs have all eroded investor confidence.
David Duong, head of institutional analysis, stated the funding setting has grow to be “paralysed” as each conventional and crypto markets face liquidity stress.
These macro headwinds have discouraged hypothesis and restricted the movement of capital into digital belongings.
Traders have pulled again, focusing as an alternative on safe-haven belongings as geopolitical danger and inflation stay elevated.
Recovery could comply with
Despite the gloom, Coinbase believes the market could discover a backside between mid and late Q2 of 2025.
A stabilisation in macro circumstances—notably a slowdown in inflation or an easing of rates of interest—may assist revive capital flows.
Coinbase warns of a possible crypto winter as altcoins drop 41% and Bitcoin breaks key help. Market cap falls to $950b, mirroring 2022’s downturn.
According to Duong, sentiment could reset shortly as soon as market stress subsides, opening the door to a restoration within the second half of the 12 months.
The report stops in need of making bullish predictions however says tactical positioning could also be helpful within the present setting. Analysts recommend conserving a detailed eye on liquidity developments and macro knowledge as potential indicators of a shift in momentum.
