A string of red flags is raising the possibility that the crypto market may be sliding into another cold stretch.
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From tumbling altcoin valuations to vanishing venture capital and macroeconomic pressure, institutional researchers at Coinbase believe the signs are aligning for what could be the beginning of a new crypto winter.
Altcoins have taken the brunt of the hit, with their collective market cap slumping to $950 billion—down 41% from December’s peak. That’s a sharper drop than during several key stretches over the last few years. Bitcoin, meanwhile, has remained comparatively stable, dropping less than 20%, reinforcing its position as the go-to asset in times of uncertainty.
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While Bitcoin’s dominance is increasing, funding for new crypto ventures has dried up. Though Q1 saw a slight uptick, investment levels are still 50–60% lower than during the last bull cycle. This capital shortage is especially constraining for the altcoin sector, which depends heavily on venture support for growth and innovation.
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Coinbase’s research suggests that traditional “bull vs. bear” labels don’t capture the full picture in crypto, where price swings are constant. Instead, the firm leans on tools like z-scores and 200-day moving averages to understand market shifts. By those metrics, both Bitcoin and the broader COIN50 index dipped below key thresholds earlier this year—indicating prolonged bearish momentum may already be underway.
Complicating matters is the broader economic backdrop. Tariff risks, fiscal tightening, and general investor caution have kept risk appetite low across markets. Crypto, often trading around the clock and reacting quickly to global headlines, has absorbed much of that pressure.
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Despite the gloom, Coinbase sees a possible turnaround on the horizon. While Q2 may remain rocky, analysts are eyeing the second half of 2025 as a potential window for recovery—if macro conditions stabilize and sentiment resets.
Alexander Stefanov
