Wintermute Cautions: Altcoin Season Concludes as Bitcoin Dominance Increases

Bitcoin dominance persists in its steady ascent as markets stabilize towards the year’s conclusion, leaving altcoins ensnared by significant supply constraints and a stringent token unlock timeline.

Wintermute’s most recent market report corroborates the concerns of numerous traders. Retail investors are shifting their focus from altcoins back to major assets, indicating the conclusion of the expected altcoin rally that usually follows Bitcoin’s robust performance.

The overall cryptocurrency market experienced further declines over the last 24 hours, with Bitcoin decreasing by 1.12% to below $87,000 and Ethereum falling 1.5% to around $3,000.

A number of altcoins encountered steep declines, with the NFT sector leading the downturn at over 9% as a lack of short-term risk appetite dominated trading behavior.

Source: Wintermute

Bitcoin and Ethereum Manage Market Strain

Crypto markets faced significant downward pressure early last week, with Bitcoin dipping below $85,000 midweek and Ethereum falling below $3,000.

Liquidations surged to around $600 million on Monday, followed by an additional $400 million each day on Wednesday and Thursday as volatile conditions rapidly forced leveraged positions out.

Bitcoin gradually rebounded towards $90,000 later in the week, yet the price movements remained limited.

Perpetual open interest decreased by $3 billion for Bitcoin and $2 billion for Ethereum overnight, rendering markets susceptible to sharp fluctuations despite diminished leverage as the Christmas holiday approaches.

Wintermute’s internal flow data indicates a resurgence of aggregate buying pressure in major assets, with institutional flow providing steady support since the summer.

Source: Wintermute

A significant shift is observed as retail traders move away from altcoins and return to Bitcoin and Ethereum, aligning with the increasing consensus that Bitcoin must lead before risk appetite can sustainably shift down the market cap hierarchy.

Currently, Wintermute noted that “the market continues to trade choppy as liquidity remains thin and discretionary desks wind down into year-end.”

Macro Challenges Intensify Altcoin Difficulties

Markets remain within a range as liquidity diminishes and discretionary desks conclude their activities for the year.

Downward movements are abrupt yet increasingly self-contained as leverage is quickly flushed and capital retreats into the most liquid assets.

Bitcoin and Ethereum continue to serve as primary risk absorbers while the broader market grapples with supply pressure and limited risk appetite.

“Funding and basis across majors remained relatively compressed through the sell-off,” Wintermute stated, with options markets continuing to price a wide array of outcomes as implied volatility remains high.

Notably, a recent analysis from Galaxy Research indicates that Bitcoin never surpassed $100,000 when adjusted for inflation using 2020 dollars, despite achieving an all-time high above $126,000 in October.

“If you adjust the price of Bitcoin for inflation using 2020 dollars, BTC never crossed $100,000,” Alex Thorn, head of research at Galaxy, remarked. “It actually peaked at $99,848 in 2020 dollar terms.”

Traditional Finance Entry Provides Medium-Term Support

Traditional financial entities continue to enter the market despite recent volatility, establishing a more robust foundation for future growth.

Bitmine has added another 67,886 ETH valued at $201 million to its treasury, bringing total purchases for December to approximately $953 million.

However, Bitcoin and Ethereum ETF net flows have turned negative since early November, indicating a decline in institutional participation and a broader contraction in crypto-market liquidity.

Source: X/@Cointelegraph

Bitcoin ETFs experienced $650.8 million in outflows over the past four days, led by BlackRock’s Bitcoin ETF (IBIT), which saw the largest single-day outflow of $157 million.

Ethereum spot ETFs also recorded a net outflow of $95.52 million, with all nine ETFs showing no inflows, according to SosoValue.

Farzam Ehsani, co-founder and CEO of VALR, outlined two possible scenarios as we approach 2026.

“Either the current drawdown reflects strategic positioning by large players ahead of renewed accumulation, or the market is undergoing a deeper reset driven by macro headwinds and Federal Reserve policy,” he informed Cryptonews.

David Schassler, head of multi-asset solutions at VanEck, also maintained a positive outlook despite the current weakness.

Bitcoin prices would recover in 2026, positioning it to be a “top performer,” despite the ongoing market downturn, VanEck manager predicts.#VanEck #Bitcoin2026 #BTCOutlookhttps://t.co/3t8TvlvWcj

— Cryptonews.com (@cryptonews) December 24, 2025

“Bitcoin is trailing the Nasdaq 100 Index by approximately 50% year-to-date, and that dislocation is preparing it to be a top performer in 2026,” he stated in the company’s 2026 outlook report.

Ehsani anticipates that Bitcoin could revisit the $100,000–$120,000 range in the second quarter of 2026, although he cautioned that “without the emergence of new major players, there will be no altcoin season; at best, we can expect a market recovery to previous levels.”

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