Six Signs Point to End of Crypto Winter Cycle

Crypto markets are showing potential signs of transitioning from a prolonged downturn to a new phase, according to a September 17th CoinDesk report titled 'Six Signs a Crypto Winter Is Ending.' Denis Gallindo, former executive at Morgan Stanley Wealth Management Global Investment Office, noted that cryptocurrencies have generally followed a four-year cycle, with recent indicators aligning with patterns observed when previous crypto winters ended.

Historically, each completed four-year cycle has featured three years of bull market followed by 12-14 months of bearish conditions. The first signal pointing to the start of a crypto spring is cycle timing: past springs began around 17 months before halving events or 12-14 months after previous peaks. September marks 17 months until the next halving and 11 months since the last peak.

The second sign involves stress at exchanges and institutions, with crypto spring historically following major exchange failures or closures. BitMEX announced closure plans in July for September, which may indicate market structure pressures have peaked.

Third is the percentage drop from peak: Bitcoin typically fell 77-84% during past winters. Bloomberg data shows Bitcoin dropped 53% from October 6, 2025 to June 30, 2026—a correction that may be sufficient but appears shallower than previous cycles.

Fourth is mining difficulty: historically, falling then rising difficulty signaled spring. This cycle saw a decline in difficulty without yet seeing a rebound.

Fifth is the 'shomcap' multiple, which compares Bitcoin's market cap to cumulative dollars paid to miners. Past winters ended when this ratio dropped below single digits; currently it has only fallen to 13x as of June 30, 2026.

Sixth is price movement: historically, a 50% rebound from lows coincided with previous market bottoms. Bitcoin also recently showed a golden cross on daily charts—a technical indicator where short-term moving averages cross above long-term ones—suggesting potential for sustained bullish momentum.

Two ongoing debates remain about whether Bitcoin can surpass its all-time high before the next halving, and if AI has replaced crypto as the dominant narrative of growth. While past cycles saw Bitcoin exceeding previous highs after halvings, this cycle saw a breakout in April 2024 ahead of the halving. The report concludes that while historical patterns offer useful context, market transitions depend on future indicator confirmation rather than single predictions.