The crypto bull run may have ended, with the market poised for a winter characterized by prolonged losses and stagnation, according to Coinbase’s institutional arm.

“The 200DMA model on bitcoin does suggest that the token’s recent steep decline qualifies this as a bear market cycle starting in late March. But the same exercise performed on the COIN50 index (which includes the top 50 tokens by market capitalization) shows the asset class as a whole has been unequivocally trading in bear market territory since the end of February,” David Duong, global head of research at Coinbase Institutional, said in a note published Monday.

Bitcoin slipped below its 200-day simple moving average (SMA) on March 9 and has since established a foothold below the same in a sign of a long-term bearish shift in momentum. The 200-day SMA is widely tracked to gauge long-term trends, with persistent moves above the same, representing a bull market and vice versa.

Duong noted this observation while addressing the challenges of identifying a crypto bear market, where 20% or more corrections are routine. In contrast, a 20% decline is typically used to define bear markets in stock markets.

The report argued that the arbitrary 20% often fails to account for a dent in investor sentiment and resulting portfolio adjustments spurred by smaller, more intense sell-offs.

“We’ve seen in the past that sentiment-driven declines can often trigger defensive portfolio adjustments, despite not meeting the arbitrary 20% threshold. In other words, we believe that bear markets fundamentally represent regime shifts in market structure – characterized by deteriorating fundamentals and shrinking liquidity – rather than just their percentage declines,” Duong noted.

In addition to the 200-day SMA, Duong highlighted bitcoin’s risk-adjusted performance measured in standard deviations (z-score) relative to the average performance over the previous 365 days as another effective method for identifying crypto bear markets.

“Our [z-score] model indicates that the most recent bull cycle ended in late February. But it has since classified all subsequent activity as “neutral,” highlighting its potential lag in rapidly changing market dynamics,” Duong said, calling for a defensive stance on risk asses for the time being.

The impending winter may be more brutal for alternative cryptocurrencies considering the slowdown in the venture capital (VC) funding.

While BTC set new highs early this year, well above the 2021 top of $70K, the bullish trend failed to inspire more risk taking in the VC space, leaving the overall funding 50%-60% below 2021-22 levels.

Duong said that the crypto market “may find a floor in mid-to-late 2Q25 – setting up a better 3Q25.”

A soft U.S. inflation report later Wednesday will likely bode well for risk assets, including bitcoin (BTC). But those expecting bullish fireworks may be disappointed.

The Labor Department will publish January’s consumer price index (CPI) report on Wednesday at 13:30 UTC. It’s expected to show that the cost of living increased by 0.3% month-on-month in January, slowing down from December’s 0.4% rise, according to Reuters estimates tracked by FXStreet. The annualized figure is expected to match December’s 2.9% reading.

The core inflation, which strips out the volatile food and energy component, is forecast to have risen to 0.3% month-over-month from 0.2%, resulting in an annualized reading of 3.1%, down from December’s 3.2%.

Lower-than-expected data, particularly the core figure, will likely bolster expectations for further Federal Reserve (Fed) interest rate cuts, which could lead to lower Treasury yields and a weaker dollar index, ultimately boosting demand for riskier assets. According to CME’s FedWatch tool, the market currently estimates a 54% chance that the Fed will either cut interest rates once or not at all this year.

While a potential adjustment in Fed rate cuts could lift BTC, it is unlikely to be the sole catalyst for a breakout from the ongoing consolidation between $90,000 and $110,000.

This is due to forward-looking market metrics indicating higher inflation in the coming months amid trade war fears, suggesting that the Fed may have a limited window to implement aggressive rate cuts.

Data tracked by Mott Capital Management shows that two-year inflation swaps have climbed to nearly 2.8%, the highest since early 2023. The five-year swap is exhibiting a similar trend. Higher inflation swaps indicate that the market is expecting inflation rates to rise in the future, prompting investors to pay a higher premium to protect themselves against potential purchasing power loss by entering into swap contracts tied to CPI.

In other words, the ongoing uptick in these metrics indicate that the progress in inflation toward the Fed’s 2% target has stalled, and price pressures are likely to increase over the coming years, probably due to Trump’s tariffs.

Plus, some investment banks believe a soft January CPI reading won’t see the Fed move away from its hawkish rate guidance. In his testimony to Congress Tuesday, Chairman Jerome Powell said the central bank is in no hurry to cut rates.

“We don’t expect that progress on inflation will be enough to prompt additional interest rate cuts from the Fed this year,” RBC’s weekly note said, adding that January’s report will show limited easing in price pressures.

BlackRock said the persistent services inflation will keep the Fed from cutting rates.

“We get U.S. CPI for January this week. Even as December’s CPI report showed signs of inflation pressures easing, wage growth remains above the level that would allow inflation to recede back to the Federal Reserve’s 2% target, in our view. We see persistent services inflation forcing the Fed to keep rates higher for longer,” BlackRock said.

Lastly, BTC may move closer to the lower end of its $90K-$110K trading range should the CPI print hotter than expected.