Six signals suggest crypto winter may be ending, Morgan Stanley analyst says
Morgan Stanley analyst identifies six historical signals of an ending crypto winter
An analyst at Morgan Stanley Wealth Management has identified six indicators that have historically marked the end of a crypto winter, a long period of falling prices in digital assets like bitcoin, and examined how many of those signals are showing up now. The analysis was published in the weekly CoinDesk newsletter Crypto Long & Short on Wednesday, written by Denny Galindo, an executive director in Morgan Stanley's Global Investment Office.
Galindo wrote that digital assets have, based on a limited set of past observations, tended to follow a four-year cycle made up of a roughly three-year bull market followed by a 12- to 14-month bear market. He noted that while the reasons for this pattern are unclear, his team uses a framework that breaks the cycle into four "seasons." The current downturn, in his view, has largely followed the historical pattern.
He cautioned that his observations are not predictions and that these signals "may prove false or premature."
The six historical indicators and where they stand
- Cycle length: Past crypto springs began about 17 months before bitcoin's next supply halving (an event that cuts the rate at which new bitcoin are created in half) or 12 to 14 months from the prior peak. September is 17 months before the next halving and 11 months from the previous peak.
- Exchange and institutional stress: Major crypto exchanges (platforms where users buy and sell digital assets) have failed or closed just before past crypto springs. Galindo pointed to BitMEX, which announced in July that it would close in September.
- Drawdowns: Previous crypto winters saw bitcoin fall 77% to 84% below its prior peak. Bitcoin's recent drawdown of 53%, based on Bloomberg price data from October 6, 2025 to June 30, 2026, is smaller than in past downturns but may still count as a signal.
- Bitcoin mining difficulty: Mining difficulty is a measure of how hard it is to add new blocks of transactions to the bitcoin network. It has historically dropped near the end of a crypto winter and then risen to mark the start of spring. Galindo wrote that difficulty has fallen but has not yet rebounded.
- Thermocap multiple: This metric compares bitcoin's market value to the total amount ever paid to miners (the people who run computers that process bitcoin transactions). Past winters ended at single-digit multiples. According to Glassnode data as of June 30, 2026, this cycle's multiple only fell to 13 times.
- Price action: A 50% rally from the recent low has historically lined up with past market bottoms, though Galindo noted this pattern does not guarantee future outcomes.
What remains uncertain
The source material ends mid-sentence as Galindo introduces a second key debate about whether AI has replaced crypto as a focus for investor interest. The full text of that section is not available in the supplied article.
Several of the six indicators only partially match the historical pattern. Bitcoin's drawdown is shallower than in previous winters, mining difficulty has not yet risen again, and the thermocap multiple only fell to 13 times rather than a single digit. It is also unclear from the article whether these mixed signals weaken the case for a transition to a new crypto spring.
Galindo explicitly stated that his observations are not predictions and may prove false.
Why this matters
Crypto winters are extended periods of falling prices that have followed each previous bull market in digital assets. Identifying when these downturns end has been a long-standing question for investors and analysts in the crypto market. The historical indicators Galindo outlined give a structured way to track whether the current downturn is approaching a turning point, though the article does not claim that a new bull market has begun.