Overnight BTC consolidated sideways at 84k. Today's 4.17 teaching chain internal referenceOptimism and Pessimism coexistIt was mentioned that the Coinbase Research Institute released a report on Xiong Chu. In this report, the Coinbase research team conducted an in-depth analysis on whether the cryptocurrency market entered a bear market. The report is included in the internal reference. Let me talk about some of the views of this report here.

The report pointed out that both the Bitcoin and COIN50 indexes have fallen below the 200-day moving average recently, and this technical indicator is usually seen as a signal of a long-term trend change. At the same time, the total market value of cryptocurrencies after excluding Bitcoin has fallen 41% from the high of US$1.6 trillion in December 2024 to US$950 billion, and the scale of venture capital funds has also decreased by 50%-60% from the peak from 2021-2022. Together, these data point to the market that may be entering a new round of "cryptocurrency winter".

The report first explores how to define the bull and bear cycles of the cryptocurrency market.

Traditional stock markets often use 20% rise and fall as the dividing standard, but this indicator is not applicable enough in crypto markets with higher volatility. For example, Bitcoin once fell 20% in a week but is still in a long-term upward trend. In contrast, the 200-day moving average (200DMA) has proven to be a more effective judgment tool - it can be regarded as a bear market characteristic when the price continues to run below the moving average and shows down momentum.

Data shows that Bitcoin has met this standard since late March 2024, and the COIN50 index, which covers the top 50 tokens, entered the bear market area earlier than the end of February.

There are multiple structural pressures behind the weak market. The implementation and potential escalation of global tariff policies have exacerbated negative sentiment, and traditional risky assets continue to be under pressure in a fiscal tightening environment, and this macro uncertainty is directly transmitted to the crypto market. Although venture capital rebounded month-on-month in the first quarter of 2025, it was still in a halved state compared with the cyclical high, resulting in a lack of new capital injection in the altcoin field. It is worth noting that Bitcoin fell less than 20% in this adjustment, but other tokens fell as much as 41%. This differentiation confirms that altcoins have higher risk premium characteristics.

The report verifies the severity of the current trend through risk-adjusted performance indicators (z-values). From November 2021 to November 2022, the price of Bitcoin fell 76%, equivalent to 1.4 standard deviation fluctuations, which is comparable to the risk-adjusted extent of the S&P 500's 22% decline (1.3 standard deviations) during the same period. Although this quantitative method can effectively filter market noise, its signal often has lag. For example, the model did not confirm that the bull market ended until the end of February, and has maintained a "neutral" rating since then, failing to reflect the sharp drop in March in time.

Historical data reveals the essential characteristics of the bear market. True market structure changes are often accompanied by shrinking liquidity and deteriorating fundamentals rather than simple price percentage changes. During historical stages such as the cryptocurrency winter from 2018 to 2019, the impact of the epidemic in 2020, and the Fed rate hike cycle in 2022, the 200-day moving average model accurately captured the trend reversal. Under the current environment, early warning signals such as market depth narrowing and defensive sector rotation have emerged, and these phenomena have predicted a significant decline in previous cycles.

The Coinbase research team believes that although the defensive posture needs to be maintained in the short term (next 4-6 weeks), it is expected that the market may find the bottom in the middle and late stages of the second quarter of 2025, creating conditions for the recovery in the third quarter.

This judgment is based on two key insights: one is that the crypto market is extremely sensitive to emotional changes, and once the turning point occurs, it often shows rapid reversal characteristics; the other is that the marginal improvement of the current regulatory environment may become a unique catalyst for future rebound. However, the report also emphasized that amid the weak performance of the stock market, the independent rise of cryptocurrencies faces challenges.

As the cryptocurrency ecosystem continues to expand to new fields such as Memecoin, DeFi, and AI agents, the practice of simply using Bitcoin as a weather vane for the entire market has become limited. The report recommends that investors need to establish a more comprehensive assessment framework, while paying attention to multi-dimensional data such as total market value, risky capital flows, and technical indicators.

The market forecast records of the research team since 2022 show that its judgment of cyclical turning points has high reference value, such as accurately foreseeing the rebound in the first quarter of 2023 and the rise in the fourth quarter of 2024.

The report ultimately conveys a core view of prudent but not pessimistic. While technical indicators and capital flows clearly indicate that the market has entered a stage of adjustment, the high volatility unique to crypto assets also means that recovery may be faster than traditional markets. For investors, the current stage is more suitable to adopt a tactical allocation strategy, while controlling the overall risk exposure, and preparing for potential market sentiment reversals.

However, all analytics are based on existing data, and the cryptocurrency market is known for its unpredictability, and any geopolitical change or regulatory breakthroughs can quickly rewrite the current market narrative.