This refers to a period in the cryptocurrency markets were performance is very poor. It is a prolonged down time during a bear cycle. Investors and traders refer to it as "Winter" since it can be painful as well as dreary.
Since cryptocurrency is known for its volatility, pullbacks can be severe. It is not uncommon for Bitcoin to see a price drop of 60% or more. When this happens, many altcoins fare much worse.
Bear markets can feel like they will never end. It is an extended period of suffering for those who are seeing gains through speculation.
During Crypto-Winters FUD is usually fierce. Sellers tend to dominate the markets, with only dead cat bounces happening along the way.
The mood is overwhelmingly pessimisstic.
As is characteristic during bear markets, the move is towards safety. Speculation takes a back seat. In recent years, with the advancement of the industry, especially in regards to stablecoins and staking, many turn their attention to yield. Here is where the mooning and Lambo mindset is replaced with getting a steady return.
Time For Builders
Crypto-Winters are a period for building. This means that those with long-term focus tend to continue forward in spite of the market action. While prices are dropping, people are looking to come out the other side stronger.
Winter is a time for clearing out. Many projects, especially those that received excessive venture capital funding are wiped out. Like every downward change in the business cycle, we see defaults taking place. Applications and companies that were leaders suddenly are exposed once the excess exits the market. We saw this with the likes of Celsius and FTX.
Builders can be thought of in a couple ways:
Individuals who keep "filling their bags" - these are long-term investors who hone in on projects they are optimistic about. As prices drop, it is a great time to add to their wallets and dollar cost average. Essentially some of their favorite coins and tokens are on sale.
Project teams that are building companies and applications - these are those who are entrepreneurs and are able to take advantage of the additions in talent in the labor market. Since many projects fail, individuals, especially coders, are available. Like any recessionary period, they are willing to work for less to have something coming in.
The key is to look towards the end of this period, often call Crypto-Spring. Since there is a clearing out during the Winter, the opportunity exists for there to be new leaders once the bear market end. This is often accompanied by another bull market.
In terms of the business cycle, Crypto-Winter is the period after the peak, one that entails the downward slide to the trough. Businesses, as well as individuals, suffer. Once the bottom is reached, then the cycle flips and starts the ascent.