Wintermute Sounds Alarm: ’Extreme Fear’ Grips Crypto Market Amid Red Wave
Wintermute's warning cuts through the noise—'extreme fear' isn't just a feeling, it's the market's new reality.
When Liquidity Talks
The algorithmic trading giant doesn't issue casual alerts. Its models track capital flows, order book depth, and volatility clustering—the kind of data that bypasses sentiment and goes straight to the gut. When Wintermute flags 'extreme fear,' it's reading the tape, not the tweets.
Red Isn't a Color, It's a Condition
Across majors and alts, charts bleed. The sell-off lacks a single catalyst—no regulatory hammer, no exchange collapse. This is a broad-based risk purge, the kind that treats crypto like any other high-beta asset when macro winds shift. Traders are pricing in uncertainty, not just in digital assets, but in the traditional systems crypto was meant to bypass.
The Contrarian Pulse
History's cruel joke in crypto markets: 'extreme fear' often plants the seeds for the next rally. It shakes out weak hands, resets leverage, and leaves a cleaner technical landscape. Of course, that's the bullish narrative—the one that conveniently forgets how long a market can stay irrational while your portfolio stays solvent.
Wintermute's alert serves as a stark reminder: in crypto, fear isn't an emotion to be managed by your therapist, but a volatility metric to be traded. The smart money is now watching for who panics first—and what gets bought when they do. After all, in finance, one person's 'extreme fear' is just another's discounted entry point... until it isn't.
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.
Also Read: MetaMask Adds Native Bitcoin Support, Expanding Beyond Ethereum
