Coinbase analysts have identified signs of a possible start of the crypto winter

The material is not an investment recommendation and is published for informational purposes only.

What’s new? Analysts of the exchange Coinbase in a new market review stated that there are some signals, potentially indicating the beginning of a new crypto winter. They noted that against the backdrop of escalating trade wars, traders have developed an extremely negative sentiment. Thus, the total capitalization of the crypto market excluding bitcoin is about $950 million, this is 41% below the maximum of December last year ($1,6 trillion).

Coinbase report

What else is known? While venture funding for crypto projects has increased quarter-on-quarter, it is still 50-60% below the levels seen at the peak of the 2021-2022 cycle. This significantly limits the attraction of new capital into the ecosystem, especially from altcoins.

According to analysts, the reason was the situation in the macroeconomy, where traditional risk assets faced pressure due to the tightening of fiscal and tariff policies, which made investment decisions more difficult.

In this environment, the road to recovery of the crypto market will be difficult even with the adoption of friendly regulation, Coinbase said.

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Analysts believe caution is appropriate for crypto traders over the next 4-5 weeks, but remain optimistic that the crypto market will recover in the second half of the year.

They noted that in traditional markets, the marker for the start of a bull or bear trend can be a move of 20% from the low or high, respectively. However, Coinbase considers such a threshold ineffective for assessing the state of the crypto market, which is characterized by much greater volatility.

For example, historically, cryptocurrencies, including bitcoin, can fall 20% in a week but still trade within a broader uptrend, or vice versa.

Moreover, cryptocurrencies available for trading around the clock often serve as an indirect indicator of risk attitudes in the broader markets during periods when traditional exchanges are closed (night hours and weekends). As a result, the crypto market may react more acutely to events in the macroeconomy.

For example, during the period of aggressive Fed rate hikes from January through November 2022, the S&P 500 stock index fell 22%, while bitcoin fell 76% — a difference of nearly 3,5 times.

At the same time, Coinbase admitted that it is not quite correct to assess the profitability of the crypto market solely on the basis of bitcoin, as new areas such as decentralized finance (DeFi) protocols, decentralized physical infrastructure protocols (DePIN), meme tokens, and AI-agents are actively developing.

However, both bitcoin and the COIN50 index (top 50 tokens by market capitalization) have recently dipped below their 200-day moving averages (200DMA), signaling potential bear long-term trends. This is consistent with a drop in overall market capitalization and a decline in venture capital funding, which are signs of potential crypto winter intensification.

“Thus, we think this warrants taking a defensive stance on risk for the time being, though we still believe that crypto prices may be able to find their floor in mid-to-late 2Q25 – setting up a better 3Q25,” the report concludes.