A monthly market review by publicly traded US-based crypto exchange Coinbase shows that while the crypto market has contracted, it appears to be gearing up for a better quarter.
According to Coinbase’s April 15 monthly outlook for institutional investors, the altcoin market cap shrank by 41% from its December 2024 highs of $1.6 trillion to $950 billion by mid-April. BTC Tools data shows that this metric touched a low of $906.9 billion on April 9 and stood at $976.9 billion at the time of writing.
Venture capital funding to crypto projects has reportedly decreased by 50%–60% from 2021–22. In the report, Coinbase’s global head of research, David Duong, highlighted that a new crypto winter may be upon us.
“Several converging signals may be pointing to the start of a new ‘crypto winter’ as some extreme negative sentiment has set in due to the onset of global tariffs and the potential for further escalations,” he said.
Related: How trade wars impact stocks and crypto
Macroeconomic woes cause crypto turmoil
The report notes that lower venture capitalist interest “significantly limits the onboarding of new capital into the ecosystem,” which is felt primarily in the altcoin sector. The cause of that, according to Duong, is the current macroeconomic environment:
“All of these structural pressures stem from the uncertainty of the broader macro environment, where traditional risk assets have faced sustained headwinds from fiscal tightening and tariff policies, contributing to the paralysis in investment decision making.“
According to Coinbase researchers, those facts have resulted in “a difficult cyclical outlook for the digital asset space,” and warrant continued caution in the next four to six weeks. Still, the report’s author said that the market is likely to change directions explosively:
“When the sentiment finally resets, it’s likely to happen rather quickly and we remain constructive for the second half of 2025.“
Duong cited some metrics to indicate when the crypto market is moving between bull and bear market phases, including risk-adjusted performance and the 200-day moving average.
Another metric was the Bitcoin (BTC) Z-score, which compares market value and realized value to identify overbought and oversold conditions. A Z-score shows how unusual current price performance is when compared to historic data.
Bitcoin’s risk-adjusted performance. Source: Coinbase
This metric “naturally accounts for crypto’s larger volatility,” but it is also slow to react. This metric tends to generate few signals in stable markets. Coinbase’s model, based on it, determined that the bull market ended in late February but has since deemed the market neutral.
Coinbase’s Z-score Bitcoin model. Source: Coinbase
Instead, Coinbase’s analyst suggested that the 200-day moving average is a better indicator for determining market trends. It smooths out short-term noise while being relevant by considering the last 200 days’ worth of market data.
Coinbase’s 200-day moving average Bitcoin model. Source: Coinbase
The report also said that gauging the broader crypto market’s trend by the direction in which Bitcoin is moving is increasingly less reliable. This is because crypto expands into new sectors with decentralized finance (DeFi), decentralized physical infrastructure networks (DePIN), artificial intelligence agents, and more, all with particular market forces independent of Bitcoin.
Related: Bitcoin’s wide price range to continue, no longer a ’long only’ bet — Analyst
Are we in a bear market?
Duong points out that the 200-day moving average suggests that Bitcoin’s recent decline moved it into bear market territory in late March. Still, applying the same model to the Coin50 Coinbase index based on the top 50 crypto assets shows a bear market since the end of February.
Coinbase’s 200-day moving average model applied to the Coin50 index. Source: Coinbase
Recent reports indicated that Bitcoin is showing growing resilience to macroeconomic headwinds compared with traditional financial markets. “Bitcoin’s decline was comparatively modest, revisiting price levels from around the US election period, “according to Wintermute.
Duong sees Bitcoin becoming less of a generalized crypto indicator as a consequence of this trend. He wrote:
“As Bitcoin’s role as a ‘store of value’ continues to grow, we think a holistic evaluation of crypto’s aggregate market activity will be needed to better define bull and bear markets for the asset class.“
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