Coinbase Institutional predicts a challenging period for the cryptocurrency market, signaling the arrival of a crypto winter. The recent downturn in Bitcoin, falling below its 200-day simple moving average, points towards an extended phase of losses and stagnation.

David Duong, Coinbase Institutional's global head of research, indicates that while Bitcoin officially entered bear market territory in late March based on the 200DMA model, the top 50 tokens have been in a bear market since late February. This shift signifies a broader trend towards bearish sentiment for the entire asset class.

Duong highlights the difficulty in pinpointing bear markets in cryptocurrencies due to their unique characteristics compared to traditional markets. He emphasizes the need for caution and risk assessment given the current market dynamics.

Looking ahead, Duong suggests that alternative cryptocurrencies might face tougher challenges during this impending crypto winter due to a slowdown in venture capital funding. Despite the expected difficulties, he anticipates a potential market recovery by mid-to-late 2025, setting up for better conditions by the third quarter of that year.

Crypto Winter Appears to Have Arrived With Bitcoin, Top 50 Tokens Falling Into Bear Market Territory: Coinbase Institutional

Traditional metrics for bear markets may not fully capture shifts in investor sentiment and market structure in the crypto space.

• The cryptocurrency market is entering a bear phase, with significant losses and stagnation expected, according to Coinbase Institutional.
• Bitcoin's decline below its 200-day simple moving average suggests a crypto winter ahead.
• Traditional metrics for bear markets may not fully capture shifts in investor sentiment and market structure in the crypto space.

The crypto bull run may have ended, with the market poised for a winter characterized by prolonged losses and stagnation, according to Coinbase's institutional arm.

"The 200DMA model on bitcoin does suggest that the token’s recent steep decline qualifies this as a bear market cycle starting in late March. But the same exercise performed on the COIN50 index (which includes the top 50 tokens by market capitalization) shows the asset class as a whole has been unequivocally trading in bear market territory since the end of February," David Duong, global head of research at Coinbase Institutional, said in a note published Monday.

Bitcoin slipped below its 200-day simple moving average (SMA) on March 9 and has since established a foothold below the same in a sign of a long-term bearish shift in momentum. The 200-day SMA is widely tracked to gauge long-term trends, with persistent moves above the same, representing a bull market and vice versa.

Duong noted this observation while addressing the challenges of identifying a crypto bear market, where 20% or more corrections are routine. In contrast, a 20% decline is typically used to define bear markets in stock markets.

"Our [z-score] model indicates that the most recent bull cycle ended in late February. But it has since classified all subsequent activity as "neutral," highlighting its potential lag in rapidly changing market dynamics," Duong said, calling for a defensive stance on risk asses for the time being.

The impending winter may be more brutal for alternative cryptocurrencies considering the slowdown in the venture capital (VC) funding.

Duong said that the crypto market "may find a floor in mid-to-late 2Q25 – setting up a better 3Q25."