Crypto Bull’s career may have finished, with the market prepared for a winter characterized by prolonged losses and stagnation, according to the institutional arm of Coinbase.
“The 200DMA model in Bitcoin suggests that the recent decline of the recent Token qualifies this as a peer market cycle that begins at the end of March. But the same exercise carried out in the Coin50 index (which includes the 50 main tokens for market capitalization) shows the class of assets as an unequivocal set in a market market in Bear Market in the end of Bear Market.
Bitcoin fell below its 200 -day simple mobile average (SMA) on March 9 and since then has established a support point below it in a sign of a long -term bearish change in the impulse. The 200 -day SMA is widely tracked to measure long -term trends, with persistent movements above the same, which represents a bullish market and vice versa.
Duong pointed out this observation while approaching the challenges of identifying a crypto bear market, where 20% or more corrections are routine. On the contrary, a 20% decrease is typically used to define bearish markets in stock markets.
The report argued that 20% arbitrary often does not take into account a dent in the feeling of investors and the resulting portfolio settings estimated by smaller and intense sales.
“We have seen in the past that decreases based on feelings can often trigger defensive portfolio settings, despite not complying with the arbitrary threshold of 20%. In other words, we believe that the bearish markets fundamentally represent regime changes in the market structure, characterized by the deteriorated foundations and reduced liquidity, instead of only their percentages of decrease,” Duong was noted.
In addition to the 200 -day SMA, Duong highlighted the performance adjusted by the risk of Bitcoin measured in standard deviations (Z score) in relation to the average yield in the previous 365 days as another effective method to identify cryptoia markets.
“Our [z-score] The model indicates that the most recent bull cycle ended at the end of February. But since then he has classified all subsequent activity as “neutral”, highlighting his potential delay in the dynamics of the market that changes rapidly, “Duong said, asking for a defensive posture about risk donkeys at the moment.
Imminent winter may be more brutal for alternative cryptocurrencies considering the deceleration in the financing of risk capital (VC).
While BTC established new maximums earlier this year, well above the maximum 2021 of $ 70k, the upward trend could not inspire more risks in the VC space, leaving general financing 50% -60% below the levels of 2021-22.
Duong said the encryption market “can find an apartment in the 2T25 mediated for purposes, establishing a better 3T25”.
