Crypto Winter Returns? Coinbase Calls the Market Break a Warning
Coinbase says the market just triggered a classic bear signal. But is this another crypto winter—or just a seasonal chill? The answer may depend on how investors read the charts.
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A Cold Front Moves In
The signs are familiar: prices drop, venture funding dries up, sentiment turns jittery. For veterans of the crypto space, it’s starting to feel like winter again.
Coinbase, in its April Monthly Outlook, refrains from explicitly declaring a bear market. However, their analysis of key charts and cautiously worded conclusions strongly suggests a break below critical support levels, advising investors to prepare for a potentially protracted downturn.
We think this warrants taking a defensive stance on risk for the time being.
— David Duong, CFA, Global Head of Research, Coinbase.
So, are we in a bear market? Or are we just in a holding pattern — waiting for spring?
Let’s unpack the clues.
This Time, the Data Doesn’t Lie
Coinbase highlights a significant 41% contraction in the total cryptocurrency market capitalization since December, from $1.6 trillion down to $950 billion by mid-April. This decline, exceeding typical seasonal adjustments, suggests a structural shift. In contrast, Bitcoin experienced a comparatively smaller drop of approximately 20%, emphasizing the greater vulnerability of altcoins.
Meanwhile, venture capital funding is still down 50–60% from 2021–22 levels, despite a mild bounce in Q1.
In practical terms? Less dry powder, fewer moonshots, and a lot of builders hitting pause.
Several converging signals may be pointing to the start of a new ‘crypto winter,
Duong writes.
In this reading, the market isn’t just cooling. It’s fundamentally shifting.
The 200DMA and the Breaking Point
Drawing on traditional finance analysis, Coinbase utilizes the 200-day moving average (200DMA) as a key indicator for defining market cycles. Currently, both Bitcoin and the COIN50 index are trading below this critical level.
This isn’t about a single candle. It’s about sustained downward momentum.
- For bitcoin, the breakdown began in late March.
- For COIN50 — an index of the top 50 crypto assets — it started a month earlier, in late February.
In fact, the COIN50’s behavior suggests the broader market had already slipped into bear territory well before BTC caught the cold. It’s a reminder that bitcoin might be the bellwether — but it’s no longer the whole weather system.
Chart insight: The 200DMA smoothed out noise and clearly captured the start of previous downturns — 2018, mid-2021, even the 2020 pandemic dip.
Why the “20% Rule” Doesn’t Work Here
Traditional markets often label a bear market as a 20%+ drop from recent highs. But as Coinbase argues, that threshold is arbitrary in crypto. This industry eats 20% dips for breakfast.
Crypto trades 24/7. It often reacts more sharply — and more emotionally — than equities.
Take 2022: while the S&P 500 dropped 22%, bitcoin fell 76% over a similar timeline.
But if you adjust for volatility — using z-scores (standard deviation moves) — both drops look nearly equivalent in risk terms.
In short: it’s not about the percentage. It’s about regime change.
Sentiment: The Unspoken Bear
Coinbase also argues that bear markets aren’t just math — they’re mood. That’s harder to measure, but not impossible.
One hint? Defensive behaviors from investors and institutions are already visible: risk-off rotations, narrowed liquidity, and early signs of sector-specific pain in areas like DeFi and memecoins.
Shrinking liquidity and deteriorating fundamentals.
The report says, are better signals than just watching for an arbitrary number.
In other words: if it feels like winter, it probably is.
Bitcoin Is No Longer the Market
This may be the most important shift. For years, analysts treated bitcoin as a proxy for crypto as a whole. But that model is breaking.
While BTC remains dominant, its role is evolving — more “digital gold” than risk-on growth asset. That means using bitcoin alone to judge the market’s health misses the pain happening in the long tail of crypto — AI tokens, alt L1s, DePIN projects, and more.
Bitcoin may still be above water, but the rest of the market is already drowning,
Coinbase notes.
So… Is This a Buying Opportunity?
Coinbase doesn’t say “Run.” But it doesn’t say “Buy” either.
Instead, it strikes a measured tone: defensive now, tactical later. The second half of 2025 may bring a turnaround — but for that to happen, macro conditions need to stabilize, and investor sentiment needs to reset.
Until then?
- Be cautious.
- Be selective.
- Don’t confuse noise for trend.
Between Winter and Whatever Comes Next
There’s one more layer here, and it’s quietly profound: crypto is growing up. The days of wild swings based purely on hype are fading. And with that comes a more sobering reality — market cycles that look more like those of traditional finance.
Coinbase's analysis offers a clear yet cautious conclusion, signaling a market landscape in transition—characterized by reduced liquidity, constrained capital, and a more discerning investor base.
Crypto doesn’t just need new narratives. It needs staying power,
one analyst quipped after the report dropped.
What the Charts Don’t Say (But Might Mean)
Coinbase isn’t calling the top. But it is calling the trend.
Absent significant shifts in policy, capital allocation, or investor confidence, a market recovery may still be several months distant.
This may not be the worst crypto winter we’ve seen. But it’s the most mature one. And that makes it the hardest to predict — and the most important to survive.
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