Bitcoin,COIN50 Index Fall Below 200-Day Moving Averages, Crypto Winter Looms

Coinbase Research has released a report indicating that both Bitcoin and the COIN50 Index have fallen below their respective 200-day moving averages. This development suggests that the market may be entering the early stages of a long-term downward trend. This trend aligns with the overall decline in total market capitalization and the contraction of venture capital (VC) funding, both of which are characteristic of a potential "crypto winter."

The report highlights several indicators that point to the emergence of extreme negative sentiment in the market. These include the implementation of global tariffs and the possibility of further escalation, which could signal the onset of a new "crypto winter."

Cryptocurrency venture capital in the first quarter of 2025 showed a rebound from the previous quarter but remains significantly lower, at 50-60% below the peak levels seen during the 2021-2022 cycle. This reduction in new capital inflows, particularly into altcoins, is a result of structural pressures stemming from the broader macroeconomic environment's uncertainty. Traditional risk assets continue to face resistance due to fiscal austerity and tariff policies, leading to decision paralysis among investors. Despite some favorable regulatory factors, the path to recovery for the crypto market remains challenging, especially given the poor performance of the stock market.

The interplay of these factors makes the outlook for the digital asset space uncertain, and caution is advised in the short term, possibly over the next 4-6 weeks. However, the report also suggests that investors should adopt a tactical market strategy and remain optimistic about the second half of 2025.