Crypto Assets Market Trends: Bear Market Definition and Future Outlook

The crypto assets market has recently shown a significant downward trend. As of mid-April, the total market value of crypto assets, excluding Bitcoin, has fallen from a high of $1.6 trillion in December last year to $950 billion, a drop of 41%. At the same time, the scale of venture capital has also decreased by 50% to 60% compared to the peak periods of 2021-2022. These signs seem to indicate that a new round of "crypto winter" may be approaching.

Multiple factors are affecting market sentiment, including changes in global tariff policies, macroeconomic uncertainty, and fiscal tightening. These factors collectively suppress the performance of traditional risk assets and pose challenges to the recovery of the Crypto Assets market.

When defining the bull-bear transition in the crypto market, the traditional "20% rule" may not apply. The high volatility of crypto assets makes price fluctuations of more than 20% in the short term quite common, but this does not necessarily indicate a fundamental change in market trends. Therefore, we need to look for indicators that are more suitable for the characteristics of the crypto market to assess market trends.

This article presents two types of alternative indicators: risk-adjusted return performance based on standard deviation and the 200-day moving average (200DMA). These indicators can better reflect the volatility characteristics of the Crypto Assets market and changes in investor sentiment.

Analysis of Bitcoin and the COIN50 Index (which covers the top 50 tokens by market capitalization) reveals that both have currently fallen below their respective 200-day moving averages, which may indicate that the market is in the early stages of a long-term downtrend. This signal aligns with the trends of declining total market capitalization and shrinking venture capital, both of which are significant characteristics that may signal the arrival of a "Bear Market" in Crypto Assets.

Nevertheless, we expect the prices of Crypto Assets to stabilize in the latter part of the second quarter of 2025, laying the groundwork for market improvement in the third quarter. However, given the current complex macro environment, it is advisable for investors to maintain a cautious attitude in the short term (expected over the next 4 to 6 weeks) and adopt defensive risk management strategies.

In the future, as the categories of crypto assets continue to expand, we need to assess the overall performance of the crypto market in a more systematic and comprehensive manner in order to more accurately define its bull and bear states. This will help investors better seize market opportunities and respond to potential risks.