These Three Catalysts Could Spark Bitcoin’s Next Rally, According To Wintermute
Crypto market maker Wintermute printed an in depth market replace on Tuesday by way of X (beforehand Twitter), providing a complete breakdown of Bitcoin’s (BTC) current collapse, who was behind the promoting strain, and what circumstances should change for a significant restoration to take maintain.
Wintermute Details Brutal Bitcoin Crash
The agency described the previous week as exceptionally extreme for Bitcoin. Prices fell beneath $80,000 for the primary time since April 2025 and continued sliding to round $60,000 earlier than stabilizing within the low $70,000 vary by the weekend.
According to Wintermute, the decline erased all of Bitcoin’s good points that adopted Donald Trump’s election victory in November 2024, accompanied by widespread liquidations.
More than $2.7 billion in leveraged positions have been worn out as months of vary‑certain buying and selling inspired extreme leverage that in the end unraveled.
Wintermute additionally pointed to the rising affect of Bitcoin trade‑traded funds (ETFs) on value motion, noting that BlackRock’s IBIT ETF alone noticed greater than $10 billion in notional buying and selling quantity on Thursday.
Wintermute recognized three main catalysts that struck the market on the similar time. The first was the January 30 nomination of Kevin Warsh as Federal Reserve (Fed) Chair, which altered expectations round financial coverage.
The second was a wave of disappointing earnings from massive expertise companies, highlighted by Microsoft shares dropping 10%. The third was a dramatic reversal in precious metals, the place silver plunged 40% in simply three days after briefly reaching $121.
The Key Conditions For BTC’s Next Recovery
Data from spot markets counsel that promoting strain was structural moderately than remoted. The Coinbase premium remained in unfavourable territory all through the decline, a sample that has endured since December and alerts sustained promoting by US traders.
Wintermute mentioned its inner over‑the‑counter (OTC) move knowledge confirmed that US counterparties have been heavy sellers all through the week, a development that was bolstered by ongoing ETF redemptions.
Institutional demand, which had supported costs earlier within the cycle, has largely light. Since November, spot Bitcoin ETFs have recorded roughly $6.2 billion in cumulative web outflows, representing the longest steady stretch of redemptions since these merchandise launched.
Wintermute defined that when ETF sponsors are pressured to promote spot Bitcoin into falling markets, it creates a unfavourable suggestions loop that amplifies draw back strain.
The agency additionally highlighted rising fragility in derivatives markets. IBIT and Deribit collectively now account for half of the crypto choices market. Wintermute mentioned the sharp promote‑off mirrored investor complacency after intervals of low volatility and sideways buying and selling, which left positioning weak as soon as costs started to maneuver.
Beyond crypto‑particular elements, Wintermute argued that the broader funding panorama has been dominated by synthetic intelligence. The agency pointed to a viral chart displaying Bitcoin’s efficiency intently mirroring software program shares within the S&P 500.
According to Wintermute, the extra vital takeaway is that AI has been absorbing a disproportionate share of world capital, typically on the expense of different asset lessons, together with crypto.
Looking forward, Wintermute expects a interval of uneven and unstable value discovery. The agency mentioned it’s tough to ascertain a sustained rally until a number of circumstances align: the Coinbase premium turning constructive, ETF flows reversing again into inflows, and foundation charges in derivatives markets stabilizing.
Featured picture from OpenArt, chart from TradingView.com