Wintermute Warns Altcoin Season is Dead as Bitcoin Dominance Soars
Wintermute reports a rotation from altcoins into Bitcoin and Ethereum amid rising Bitcoin dominance, with year-end liquidity thinning and token unlocks dampening risk appetite. Bitcoin is down about 1.12% to roughly $87,000, and Ethereum has declined about 1.5% to around $3,000, while the NFT sector leads market losses at over 9%.
Liquidity and leverage conditions remain tight, with Bitcoin dipping below $85,000 midweek and Ethereum breaching $3,000. Liquidations reached around $600 million on Monday and about $400 million on Wednesday and Thursday. Meanwhile, perpetual open interest for BTC and ETH has declined, indicating reduced leverage heading into the Christmas period.
Retail traders are rotating out of altcoins into Bitcoin and Ethereum, whereas institutional inflows have provided steady support since summer. Galaxy Research notes that when inflation-adjusted to 2020 dollars, Bitcoin has never crossed $100,000, peaking at approximately $99,848.
In December, Bitmine added 67,886 ETH (about $201 million) to its treasury, bringing total purchases that month to approximately $953 million. However, Bitcoin ETFs experienced outflows totaling $650.8 million over the past four days, led by BlackRock's IBIT at $157 million, and Ethereum spot ETFs posted around $95.5 million in outflows with all nine ETFs showing no inflows.
Farzam Ehsani of VALR outlines two potential scenarios for 2026: either large players accumulate positions ahead of renewed buying or macroeconomic headwinds and Federal Reserve policies lead to a deeper market reset. VanEck analyst David Schassler suggests Bitcoin could be a top performer in 2026 despite current weakness, projecting a possible return to $100,000–$120,000 in the second quarter of 2026, but cautions that any altcoin season will require new major participants.
