Wintermute, a prominent player in the cryptocurrency market, has released an analysis of Bitcoin's recent sharp decline, asserting that the movement was "a purely macro-driven repricing, not a fundamental one."
The firm's report indicates that the sell-off experienced last week was primarily instigated by a swift reversal in expectations regarding a December US interest rate cut. Cryptocurrencies, being highly sensitive to risk, were consequently the most severely impacted asset class.
Wintermute highlighted that the central focus of last week's market activity was the repricing of the anticipated December Fed rate cut. The report elaborated that following Federal Reserve Chair Jerome Powell's departure from the notion of a "definite December cut," investors began to scrutinize the individual viewpoints of FOMC members.
This shift in sentiment led to a weakening of US risk assets, as the probability of a December rate cut plummeted from 70% to 42% within a single week. The cryptocurrency market bore the brunt of this increased pressure.
The report further noted that the selling pressure was particularly concentrated during US trading hours, providing a clear indication that the downward movement was macro-driven.
According to Wintermute's findings, digital assets occupied the lowest position on the performance chart among all asset classes. Unusually, Bitcoin (BTC) and Ethereum (ETH) experienced greater value depreciation than the broader altcoin basket. Two key factors contributed to this phenomenon:
- •Altcoins have been subjected to prolonged downward pressure.
- •Certain narrow market segments, such as privacy coins and fee switch projects, demonstrated local strengthening.
Bitcoin's price trajectory saw it revisit the $100,000 level, a mark not seen since May. The $100,000 level was defended twice, on November 4th and 7th. Although the price recovered to $110,000 last week, selling pressure re-emerged as soon as US markets opened, ultimately resulting in a breakout below $100,000.
Wintermute's institution concluded that this price action does not signify a structural problem but rather a seasonal and expectation-based reduction in risk exposure.
The firm argued that the current price action should not incite panic, as global macro conditions remain supportive. Several factors contribute to this outlook:
- •Japan is preparing a stimulus package valued at $110 billion.
- •China is continuing its monetary easing policies.
- •The quantitative tightening (QT) program in the US is set to conclude next month.
- •Fiscal measures, such as a potential new $2,000 stimulus package, remain on the agenda.
Consequently, the report posits that the sales were a matter of timing rather than a directional shift. Furthermore, liquidity conditions in the market are anticipated to improve towards the first quarter of 2026.