Crypto Market Crashes $650B: Coinbase Warns Bear Phase Just Beginning

Coinbase Institutional’s April 2025 Outlook pulls no punches: crypto winter might already be here. The firm flags a chilling combination of technical breakdowns, plummeting sentiment, and macro pressure. Bitcoin price and the COIN50 index have dipped below their 200-day moving averages, a reliable red flag for long-term downtrends. Add to that a 41% crash in the total crypto market cap (excluding Bitcoin) and sluggish VC activity and it’s clear the ecosystem is shifting into risk-off mode. While there’s still hope for recovery in Q3, the report urges caution through Q2.

Crypto Market Breakdown: A Bearish Shift in Motion

Coinbase Institutional’s latest report presents a sobering picture: the crypto market is showing clear signs of entering a bearish phase. The total market cap, excluding Bitcoin price, has plunged from $1.6 trillion in December 2024 to $950 billion in mid-April, down 41%. That drop has been accompanied by a notable decline in venture capital activity, which remains 50–60% below 2021–22 levels.

More importantly, both Bitcoin and the broader COIN50 Index have slipped beneath their 200-day moving averages. According to analysts this isn’t just a coincidence; it’s a strong signal that the market is undergoing a significant change. Combined with global macro factors like rising tariffs and fiscal tightening, markets are battling a storm on multiple fronts.

COIN50 is like the S&P500 of crypto markets, a benchmark that tracks the performance of the top 50 eligible digital assets and provides diversified exposure to a broad range of tokens, sectors, and themes.

Track the market: https://t.co/ThzADXYbPj

— Coinbase 🛡️ (@coinbase) April 10, 2025

Interestingly, the report questions the classic “20% rule” for defining bear markets, pointing instead to more nuanced indicators like z-scores and long-term moving averages. The current pattern, they argue, mirrors the 2018–2019 crypto winter, suggesting that sentiment, not just price, is collapsing.

Coinbase believes that a market floor could emerge in mid-to-late Q2, with opportunities opening up in Q3 2025. But until then, their outlook is cautious, especially for altcoins, which are bearing the brunt of the downturn.

Technical Breakdown and Sentiment Collapse Paint a Bearish Picture

The April report leans heavily on technical indicators to support its bearish thesis. Both Bitcoin price and COIN50 falling below their 200DMAs is more than symbolic; it reflects sustained downward pressure. The broader altcoin space, in particular, is facing steep corrections, high volatility, and a drying up of capital inflows. Coinbase points to shrinking market depth and rising defensiveness across sectors. Their models show that the last meaningful bullish trend ended in February, with all price action since classified as “neutral” or worse.

By challenging traditional bear market definitions, Coinbase adds context that crypto investors often miss: sentiment and structural liquidity matter just as much as price. This means that even with “only” a 17% year-over-year drop in market cap, crypto is arguably in worse shape than it appears on paper.

For now, the strategy is clear: risk-off until there’s confirmation of a floor. The trading environment remains fragile, with macro headwinds from tariffs to tight monetary policy clouding any near-term recovery. The signal from Coinbase is cautious but not hopeless: endure Q2, then reassess in Q3.

Conclusion – Defensive Now, Hopeful Later

Crypto winter or just a cold front? Coinbase thinks the storm has already hit. With major indices below technical support and sentiment scraping the bottom, the crypto market is flashing red. That said, the second half of 2025 could offer light at the end of the tunnel if macro conditions stabilize and investor confidence returns. Until then, the bear is out of hibernation, and it’s best not to poke it.