Coinbase Market Report: Altcoin Capital Withdrawal and Market Outlook
On April 15, the well-known exchange Coinbase released a market report indicating a significant withdrawal of capital from the crypto market, with confidence and technical indicators showing a clear decline. It pointed out that the capital withdrawal from altcoins has led to a dramatic drop of 41% in market capitalization from last year’s peak. Despite the gloomy market atmosphere, Coinbase has provided a slight boost of confidence, believing that this downturn will reach its bottom in Q2, with a potential rapid rebound in Q3.
Altcoin Market Capitalization Plummets 41%, Crypto Funds Shrink Significantly
Coinbase noted:
- The market capitalization of altcoins has fallen from a high of $1.6 trillion at the end of 2024 to $950 billion in mid-April this year, a decline of 41%.
- On April 9, it even briefly dropped below $910 billion, setting a new low in nearly six months.
Venture capital is pulling out, with investments retreating by 50% to 60%:
- Compared to the peak periods of 2021-2022, venture capital funding for crypto-related projects has significantly shrunk by 50% to 60%.
- This has the most substantial impact on early-stage projects and the altcoin market, with new capital clearly unable to enter.
Coinbase’s research director, David Duong, pointed out that the main reason is the uncertainty of global trade policies and fiscal tightening, which has significantly lowered the willingness to invest in risk assets.
Macroeconomic Turbulence Continues, Crypto Market Stagnates
Coinbase believes that the current market is stuck in a “paralysis of investment decisions,” primarily due to:
- Global interest rate hikes and tariff policy pressures.
- The United States tightening regulations on certain high-risk assets.
The traditional financial market is also under pressure, indirectly affecting the flow of funds into the crypto sector, resulting in an overall “cycle of difficult recovery.”
Technical Analysis: Coinbase Index Entered Bear Market in February
Coinbase determined the market’s entry into a bear market based on the following indicators:
- Coinbase Coin50 Index: Tracking the top 50 cryptocurrencies, it has been in a bear market since the end of February (Figure 1).
Figure 1. Shows the COIN50 Index has fallen below the 200-day moving average.
- Bitcoin, on the other hand, broke below the 200-day moving average at the end of March, officially entering bear market territory (Figure 2).
Figure 2. Bitcoin price curve has fallen below the 200-day moving average.
Despite Bitcoin’s price appearing stable, these long-term indicators have raised alarms.
BTC No Longer the Market Weather Vane, New Generations Following Different Paths
Coinbase pointed out that:
- Market trends can no longer be solely determined by Bitcoin (BTC), as the market has split into multiple independent ecosystems:
- DeFi
- DePIN
- AI agent
These ecosystems have different funding and fundamentals, and do not completely follow Bitcoin’s lead, resulting in a scenario of diverse competition.
When Will There Be a Turnaround? Coinbase Predicts Possible Q3 Rebound
Although short-term observation is still necessary, Coinbase believes, “Once market sentiment resets, the reversal will come quickly. We remain positive about the second half of 2025.”
In other words, Q2 may continue to experience volatility, but as long as a turning point appears in the market, a rebound is likely to be a “V-shaped explosion.”
How Investors Should Approach This Market Cycle: Three Key Suggestions
- Avoid speculation on altcoins; observe market bottom signals before entering.
- Pay attention to long-term indicators to avoid buying high and selling low.
- In the medium term, start focusing on application-driven projects like AI and DeFi, and observe which ones survive and have strong fundamentals.
Risk Warning
Investing in cryptocurrencies carries a high level of risk, and their prices can be extremely volatile; you may lose all your principal. Please carefully assess the risks.