- Coinbase Research has warned that a new crypto winter may be underway, citing technical breakdowns, falling investor sentiment, and macroeconomic headwinds as key factors.
- While the current slump mirrors the 2021–2023 downturn, Coinbase believes a market recovery could begin in the second half of 2025.
Coinbase has sounded the alarm on what could be the beginning of another crypto winter, one that might echo the brutal downturn seen from late 2021 to early 2023.
In a recent research note, David Duong, Head of Institutional Research at Coinbase, outlined a confluence of warning signs suggesting that digital assets may be entering a prolonged bearish phase.
How Do You Define a Crypto Bear Market? 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. Here's one methodology to track… pic.twitter.com/hXEJwJ2sWx
— David Duong (@Dav1dDuong) April 15, 2025
Duong pointed to a significant technical breakdown as one of the clearest red flags. Both Bitcoin and the Coinbase COIN50 index have fallen below their 200-day moving averages — a key level often viewed by traders as the tipping point between bullish and bearish momentum. This breach could indicate that the broader market is losing structural strength.
The altcoin market appears to be bearing the brunt of the stress. Excluding Bitcoin, the total crypto market cap has slumped to $950 billion, a stark 41% drop from its December 2024 peak of $1.6 trillion. That valuation is now beneath levels seen during the August 2021 to April 2022 period — the heart of the last crypto boom.
Adding to the gloom is the continued stagnation of venture capital inflows. Although marginally better than the lows seen in late 2024, VC investment remains 50–60% below the heights reached during the 2021-2022 bull market. This lack of funding is stifling innovation and discouraging growth in early-stage blockchain projects.
Coinbase also attributes part of the market’s paralysis to mounting macroeconomic pressures. Escalating global tariffs and continued fiscal tightening have reduced investor risk appetite, drying up liquidity not only in crypto but across financial markets. Duong noted that this “paralysis” has gripped both traditional and digital assets, leading Coinbase to recommend a more defensive stance in the near term.
While the current slump may lack the chaos of 2022 — a period marked by high-profile crypto collapses and nearly $2 trillion in losses — the symptoms are familiar: thinning liquidity, bearish technicals, and investor fatigue. The similarities have raised fears that another extended downturn could be unfolding.
However, there is a glimmer of optimism. Duong suggests that while the floor may not yet be in, a market bottom could form between mid-to-late Q2 2025, potentially setting the stage for a rebound in the second half of the year. Coinbase believes that once sentiment shifts, recovery could come swiftly.
For now, the warning is clear: winter may be coming again for crypto — but as in past cycles, those who weather the storm might find new opportunities in the thaw.