Crypto Market Consolidates as Funds Rotate to BTC and ETH After $2B Liquidations: Wintermute
The crypto market is currently in a consolidation phase following about $2 billion in liquidations within just over an hour, according to Wintermute. Despite the significant liquidation event, there has been no follow-through selling, indicating a stabilizing environment.
Bitcoin is trading near $92,000, while the total crypto market capitalization stands around $3.25 trillion. Last Friday experienced an intraday drop of approximately $4,000 driven by cascading liquidations, reflecting market fragility but not disrupting the ongoing rebound.
Funds are rotating into major assets, with inflows into Bitcoin (BTC) and Ethereum (ETH) coming from both retail and institutional investors. The CME basis has compressed, showing low conviction in leveraged bets, and strategies such as delta-neutral and carry trades in lower-cap assets are currently favored.
Market participants are closely watching upcoming macro events, including the Federal Reserve's decision and the Bank of Japan's policy announcements next week, as these are expected to determine the next directional move and influence volatility through liquidity.
Wintermute's overall outlook is that consolidation will remain the base case through the year-end, with market activity focused on liquid assets amid subdued funding and leverage conditions.
