A report by Coinbase indicates that while the crypto market has faced significant contraction, a rebound could be on the horizon. The altcoin market cap declined by 41% from its December 2024 peak of $1.6 trillion, dropping to approximately $950 billion in mid-April 2025. Meanwhile, venture capital funding for crypto projects has decreased by 50%–60% since 2021-22. David Duong, Coinbase's global head of research, notes that negative sentiment could signal the onset of a new 'crypto winter,' primarily due to broader macroeconomic pressures such as fiscal tightening and global tariffs. Despite a challenging outlook, Duong suggests that if sentiment shifts positively, the market could recover quickly in the latter half of 2025. Key indicators for market movements include Bitcoin's risk-adjusted performance and the 200-day moving average, which currently suggests that Bitcoin entered bear market territory in late March. As the crypto ecosystem diversifies, Bitcoin's traditional role as an indicator may diminish, necessitating a more holistic evaluation of the market's health.

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