Wintermute: The macro backdrop remains positive, but BTC needs to regain momentum for the market to have a broad recovery foundation

Wintermute released a report stating that over the past week, the market primarily digested the sharp adjustment of interest rate cut expectations— the probability of a rate cut plummeted from 70% to 42% within a week, during which the vacuum of macro data amplified volatility. Powell's ambiguous statements on rate cuts forced the market to reassess the divergences among FOMC members, revealing that there is far from a consensus on rate cuts. Risk assets weakened in response, with the cryptocurrency market, as a sentiment barometer, being the hardest hit.

In cross-asset performance, digital assets continued to lag behind. This weakness is not a new phenomenon: since early summer, crypto assets have consistently underperformed the stock market, partly due to their negative bias relative to the stock market. Interestingly, in this round of decline, BTC and ETH actually underperformed the overall altcoin market, which can be attributed to: altcoins have been in a prolonged downtrend; segments like privacy coins and fee-switching have shown some local resilience. Some of the pressure comes from adjustments in whale positions.

Although there is a seasonal pattern of profit-taking from the fourth quarter to January of the following year, this year it has clearly been brought forward, as many traders expect the four-year cycle theory to suggest that next year will enter a subdued period. This consensus creates a self-fulfilling prophecy: early risk control behaviors exacerbate volatility. It should be noted that the current selling pressure is not supported by any fundamental deterioration, but is purely a macro-driven adjustment led by the United States.

Currently, the macro backdrop remains positive, with global easing continuing, U.S. QT nearing its conclusion, active fiscal stimulus channels, and liquidity expected to improve in Q1. The key missing signal in the market is the stabilization of leading assets—unless BTC returns to the upper range of its volatility zone, the market breadth is unlikely to expand, and the narrative logic will remain short-lived. The current macro environment does not align with the characteristics of a prolonged bear market; as policies and interest rate expectations become the main catalysts, once leading assets regain momentum, the market will have a broad foundation for recovery.