Crypto Witnessing a bear market but likely to Recover in Q3 of 2025: Coinbase

A report by Coinbase shows that the crypto market is losing momentum with bearish signals but is likely to recover in the third quarter, July to September, of this year.

A monthly crypto market outlook released by the largest exchange by trading volume in the U.S., Coinbase, reveals that the crypto investors are currently not smiling to the bank, however, an upward trend is probably underway later this year.

🐻 Coinbase Warns of New Crypto Winter

“Multiple red flags” amid market chaos

Coinbase Institutional just dropped a report suggesting we might be entering a new crypto winter. Here’s why:

➖ Total crypto market cap (excluding BTC) has tanked
➖ VC funding hit lows in Q1
➖ BTC… pic.twitter.com/YlnBFZp9z2

— ProtectedPool (@protectedpool) April 16, 2025

According to the report, several signals indicate that the market is heading towards a new “crypto winter” in response to Trump’s tariffs, potential retaliation, and expected further escalation.

“Several converging signals may be pointing to the start of a new ‘crypto winter’ as some extreme negative sentiment has set in due to the onset of global tariffs and the potential for further escalations,”

the report stated.

The report stated that the cryptocurrency market cap, excluding Bitcoin, stood at $950B by mid-April, showing a 41% decline from its December 2024 high of $1.6 trillion; in addition, its level is 17% below the levels from the same period, April, last year, 2024.

The altcoin market cap currently stands at $980 billion.

Macroeconomics Contributes Greatly to the Crypto Woes

In the aspect of crypto venture capital funding, which are funds for crypto-based projects, it rose in the Q1 of 2025 but presently down by 50%-60% compared to 2021-2022.

The report stated that certainly the restriction of inflow of new capital faced by the cryptocurrency ecosystem, especially in the altcoin sector, is largely caused by broader structural issues tied to the current uncertain macroeconomic environment.

As a result, even though the crypto sector is witnessing some positive developments, particularly on the regulatory front, its overall return to the better days remains difficult because of the continuous struggles of the wider financial markets.

The report further defined how a bull or bear market is determined by stating that in traditional equities, a bull or bear market is often defined by a 20% rise or fall from a recent market low or high.

However, “that figure is somewhat arbitrary and certainly less applicable to crypto markets, which routinely experience 20% price swings in short periods that don’t necessarily signal true changes in the market regime”

In addition, historical patterns reveal that such fluctuations may occur within a sustained upward or downward trend of cryptocurrencies like Bitcoin, i.e. a brief 20% drop could still be part of a broader bull run—and vice versa.

Therefore, using conventional definitions to assess market conditions in crypto may lead to misleading conclusions.

Crypto Market Soared After the Trump’s Tariffs Pause

Meanwhile, Crypto markets surged as Trump announced a 90-day pause on tariffs for most countries, boosting Bitcoin and Altcoins prices. Which was a great relief for the digital assets industry after witnessing a “Black Monday”.

After the announcement, the global market cap rose by 6.04% to $2.6 trillion, while major tech stocks and Asian indices experienced significant gains too.