Haciyev Reşit 
As the crypto market has experienced sharp volatility in recent days, major market maker Wintermute published an eye-opening report analyzing the dynamics behind the recent moves. Analysts stated that signals of a potential rate hike from the Bank of Japan were the primary force shaking global markets, and although the downturn appears negative in the short term, it may have constructive long-term effects on market structure.
Japan’s Policy Was the First Trigger for Crypto
According to Wintermute analysts, the main trigger behind the sharp pullback in crypto markets was the strong signal from the Bank of Japan that it may raise interest rates in December. A potential rate hike directly impacts the long-standing yen carry trade, a mechanism in which investors borrow cheap yen and allocate capital to risky assets. With the threat of higher rates, this strategy began to unwind.
This development triggered rapid deleveraging across global markets, causing chain-reaction outflows from risk assets. Due to its high volatility, the crypto market was among the first to be affected. Analysts emphasized that Bitcoin and other digital assets declined not due to technical factors, but as a result of a macro-driven sell-off.
Why Did Gold Go Up?
Analysts also evaluated gold’s strong recent performance, making an important comparison with Bitcoin in terms of risk perception. They noted that Bitcoin is sometimes referred to as “digital gold”, and during calm market conditions, it behaves similarly. However, during periods of global uncertainty, interest rate shifts, and geopolitical risk, investors still turn to physical gold.
They explained:
“Bitcoin may act like digital gold in stable periods, but its fragility becomes clear in times of crisis. When investors seek a true safe haven, they still move toward physical gold. We saw this clearly during the recent decline. Gold remains the first stop in risk aversion; Bitcoin still shows a volatile profile under macro pressure.”
“The Market Is Actually Cleansing Itself”
One of the most notable sections of Wintermute’s report focused on improvements in market structure. Forced liquidation of leveraged positions has had a healthy long-term impact:
- Open interest in perpetual futures dropped from $230 billion to $135 billion
- This means a significant reduction in forced liquidation risk
- Excessive long positions have been wiped from the system
The report noted:
“The declines look bad, but the market has been cleansed of aggressive leverage. This cleanup enabled the technical conditions needed for a stronger bottom formation.”
Risk Still Very High for Altcoins
Wintermute analysts emphasized that the altcoin market remains weak and is more fragile against macro pressure. According to the assessment:
- Altcoin rallies are short-lived
- When Bitcoin falls, altcoins suffer much deeper losses
- Liquidity still flows primarily into Bitcoin and Ethereum
Analysts stated:
“Even if altcoins rise, they are quickly crushed by macro events. Investor psychology remains: ‘Bitcoin and Ether recover first.’ Therefore, risk levels in altcoins are still very high.”
Conclusion
Wintermute’s analysis highlights that the recent downturn in the crypto market is not solely negative, but also shows key signs of structural strengthening. The reduction in leverage and the decline in open interest to healthier levels may lay the foundation for a more sustainable bottom, particularly for Bitcoin. However, the altcoin market remains highly risky, and investors continue to take a cautious stance.
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