According to a new report from Coinbase, crypto prices may stabilize by the end of Q2 2025. Analysts also suggest that the market could rebound in Q3, assuming global conditions improve. This cautious optimism comes after a difficult start to the year for altcoins and venture capital in the blockchain sector.
Market Capitalization Drops Sharply
The total crypto market cap excluding Bitcoin has dropped by 41% since its December 2024 peak of $1.6 trillion. As of March 2025, it stands at just under $950 billion.
Meanwhile, venture capital investment in crypto remains 50–60% below the peak levels recorded during the 2021–2022 bull cycle. These figures reflect weak market sentiment and increased investor caution.
Traditional Bear Market Signals Are Less Reliable
Historically, a 20% drop in price was enough to declare a bear market. However, Coinbase analysts argue that this rule is no longer valid in crypto. Instead, they recommend using:
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Risk-adjusted return metrics
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200-day moving averages
These indicators offer a clearer picture of long-term trends.
For example, Bitcoin has declined less than 20% since December, but it now trades below its 200-day moving average. This often signals deeper market weakness, even when headline price changes are small.
Altcoins Suffer Heavier Losses
Coinbase’s COIN50 index, which tracks 50 leading altcoins, has also fallen below its 200-day moving average. Historically, this pattern suggests that market weakness could last longer than initially expected.
Although Bitcoin’s losses have been relatively modest, many altcoins have experienced more severe declines. As a result, investor confidence in high-risk digital assets remains low.
Cautious Optimism Moving Into Q3
Despite the downtrend, Coinbase analysts remain cautiously optimistic. They believe the market is likely to find a bottom by mid-to-late Q2 2025. If macroeconomic and regulatory conditions improve, a recovery in Q3 appears possible.
However, this scenario depends on several external factors, including inflation, interest rates, and geopolitical stability. Still, the shift in investor strategy—focusing on fundamentals and technical indicators—could bring more resilience to the crypto market over time.
