Coinbase researchers suggest that crypto prices may find their floor in mid-2025 before a wider recovery. The Bitcoin (BTC) price trades below the 200-day moving average, signaling a bearish trend that puts traders on high alert. Furthermore, the COIN50 index dropped in several key metrics, indicating caution in a range of altcoins.
Bullish Outlook Wanes
A new Coinbase institutional report depicts the current market realities amid evolving macro trends. According to the release, converging signals may be forming at the start of a crypto winter, as negative sentiments overshadow the bulls. This year, Bitcoin has faced major obstacles to its potential uphill run. The crypto leader by market cap saw crashing prices spilling into altcoins.
After breaking a new all-time high above $108k, the asset bowed to the macro trends as the stock market correlation continued. As a result, Bitcoin recorded flash dips and sits at $83,700. The asset’s 200-day moving average shows a sharp decline, highlighting a bearish phase that kicked off in March after a previous deep. While the first quarter had its fair share of headwinds, Q2 2025 kicked off with President Trump’s sweeping tariffs.
A look at the COIN50 index reiterated crashing trader sentiments, as assets have been trading under bearish zones since late February. This marked the end of speculations for an altcoin season, at least for the short term, as prices fell through multiple support levels. In January, altcoin bulls predicted a massive altcoin season that would fuel assets to multiple all-time highs.
“Indeed, this is consistent with the total crypto market cap (ex-BTC) falling by 41% from its December 2024 high to $950B, compared to a (less than) 20% decline in bitcoin over the same period. This disparity underscores the higher volatility and risk premium inherent to altcoins further down the risk curve… Thus, we think this warrants taking a defensive stance on risk for the time being.”
Crypto VC Funding Declines
The dwindling market cap lowered bullish expectations ahead of the second quarter. Meanwhile, institutional capital brought fresh shock to the market. In recent months, institutional funds have triggered massive asset growth, leading to mass adoption.
According to the report, crypto VC funding grew from the last quarter, but it’s still at a 60% low compared to the 2021/2022 cycle. A low capital inflow reduces investment and limits large accumulation for institutions. Overall, this delays market expectations for a bull cycle.
