According to a monthly market analysis by Coinbase, a publicly traded cryptocurrency exchange based in the United States, the cryptocurrency market has shrunk, but it seems to be preparing for a stronger quarter.
Coinbase’s April 15 monthly outlook for institutional investors states that by mid-April, the altcoin market cap had dropped 41% from its December 2024 highs of $1.6 trillion to $950 billion. According to statistics from BTC Tools, this measure saw a low of $906.9 billion on April 9 and was now trading at $976.9 billion.
From 2021 to 2022, venture capital financing for cryptocurrency startups reportedly fell by 50% to 60%. According to Coinbase’s global head of research, David Duong, a new crypto winter might be on the horizon.
The initiation of global tariffs and the possibility of additional escalations have caused some extreme negative mood, which he suggested might be the beginning of a new “crypto winter” based on a number of converging indications.
Crypto instability is caused by macroeconomic issues
Lower venture capitalist interest, which is felt mostly in the altcoin sector, severely restricts the onboarding of new capital into the ecosystem, according to the report. According to Duong, the current economical climate is the reason behind that. These structural challenges are all a result of the macroenvironmental uncertainty, where traditional risk assets have been subject to persistent pressures from tariffs and fiscal tightening, which has caused investment decision-making to become paralyzed.
According to Coinbase experts, these factors have resulted in a challenging cyclical prognosis for the digital asset industry, which requires sustained caution over the next four to six weeks. Nonetheless, the report’s author stated that the market is expected to alter directions dramatically:
It should happen swiftly when the sentiment does eventually turn around, and we stay optimistic for the second half of 2025.
Duong mentioned risk-adjusted performance and the 200-day moving average as indicators of when the cryptocurrency market is transitioning between bull and bear market stages.
The Bitcoin (BTC) Z-score was an additional indicator that was used to determine overbought and oversold conditions by comparing market value and realized value. A Z-score illustrates how out of the ordinary the present price performance is in relation to historical data.
Although it reacts slowly, this statistic “naturally accounts for crypto’s larger volatility.” In markets that are steady, this statistic typically produces little indications. The bull market ended in late February, according to Coinbase’s model, which has subsequently declared the market neutral.
A superior measure for identifying market trends, according to Coinbase’s analyst, is the 200-day moving average. By taking the last 200 days’ worth of market data into account, it eliminates short-term noise while remaining relevant.
Additionally, the analysis stated that it is becoming less and less accurate to predict the trajectory of the larger cryptocurrency market based on the direction of Bitcoin’s movement. This is due to the fact that cryptocurrency is evolving into new fields, such as artificial intelligence agents, decentralized physical infrastructure networks (DePIN), and decentralized finance (DeFi), each of which has unique market forces that are not influenced by Bitcoin.
Is the market a bear market?
The 200-day moving average, according to Duong, indicates that Bitcoin entered bear market territory in late March as a result of its recent slump. Nevertheless, a bear market has been there since the end of February when the Coin50 Coinbase index, which is based on the top 50 cryptocurrency assets, is subjected to the same model.
According to recent reports, Bitcoin is becoming more resilient to macroeconomic challenges than traditional financial markets. According to Wintermute, the price of bitcoin dropped quite little, returning to levels seen throughout the US election season.
Duong believes that this tendency will make Bitcoin less of a general-purpose crypto indicator. What he wrote:
We believe a comprehensive assessment of the overall market activity of cryptocurrency will be required to more accurately define bull and bear markets for the asset class as Bitcoin’s function as a “store of value” grows.
