Key Highlights
- Wintermute warns traders to be cautious as Bitcoin and the crypto market are consolidating, not trending.
- The firm highlighted that Fed policy, AI sector changes, and Bank of Japan risks are driving volatile price action.
- The overall crypto market is consolidating, with Bitcoin testing the lower end of its recent range.
As the crypto market faces heavy selling pressure, Wintermute, the leading market maker, explained that major factors are driving the volatile price action of the market. According to the market maker, U.S. Federal Reserve policy, developments in the AI sector, and potential actions by the Bank of Japan (BoJ) are controlling market direction.
In a recent post on X, Wintermute said, “Despite some breakouts on the lower bounces, the market continues to be consolidating rather than trending.” The firm noted that even though the prices are occasionally trying to start a rally, the crypto market is mostly moving sideways instead of showing a clear upward or downward trend.
Wintermute added that Bitcoin (BTC) is testing the lower end of its recent range, and traders are being cautious at the moment as they wait for a strong confirmation to enter the market.
Crypto market falls under sell momentum
The crypto market is currently trading in the red, with Bitcoin trading near $85K, an almost 3% drop in the last 24 hours, adding to its 8% drop in a month. This drop followed rejection near the $94,000 range earlier in the month.
Meanwhile, altcoins felt the impact even more, with Ethereum, Solana, XRP, and BNB posting steeper percentage losses than Bitcoin, with many dropping more than an average of 4% in a single day, according to CoinMarketCap.
Wintermute said the market is entering the penultimate full trading week of 2025 with “markets broadly lacking direction.” In other words, the overall trend is unclear, and investors are not confident about where prices will go next.
Signs of fatigue across digital assets and equities
According to Wintermute, “Consolidation has become the key focus rather than continuation, as the year-end rally failed to fully materialize.” The firm added that digital assets and equities are “showing signs of fatigue, with rotation and de-risking becoming increasingly visible beneath the surface, particularly on the equity side as non-tech sectors begin to catch up after a prolonged tech-led compound.” It pointed out that the market is adjusting and the stock market is also affected, with money shifting from some popular sectors to others.
The report noted that U.S. equities are moving away from crowded AI trades, while crypto’s initial strength is fading. Bitcoin had been trading tightly between $88,000 and $92,000 but recently broke to test $86,500.
“Whether this signals a deeper retracement or a simple range extension now depends on buyer response as competing macro narratives play out,” Wintermute noted. In other words, the next price move depends on whether buyers step in or if other global factors continue to influence the market.
The firm concluded that the market is consolidating and digesting uncertainty. According to them, “Price action so far reflects consolidation and position-cleaning rather than outright risk aversion.” The current movements in the market are normal adjustments and not a full market panic. However, traders should expect choppy prices and be cautious until there’s clear guidance on policy.
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