Wintermute Trader: BTC is stuck between $64K–$67K; the market has entered a macro paradigm shift phase
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Wintermute Trader: BTC is stuck between $64K–$67K; the market has entered a macro paradigm shift phase
Crypto assets are currently being sold off as the “highest-beta growth assets,” and whether this trend is a short-term rotation or a genuine paradigm shift is the most critical question to watch in 2026.
Navigating Web3 tides with focused insightsAuthor: Jjay_dm, Wintermute OTC Trader
Translated and edited by: TechFlow
TechFlow Intro: Wintermute is one of the world’s largest crypto market makers. This market update, written on February 23, offers the clearest current assessment of the state of the crypto market.
It goes beyond simple bullish or bearish calls—instead integrating three key themes—AI repricing, slow deglobalization, and Federal Reserve ineffectiveness—into a unified framework. It explicitly states that crypto assets are currently being sold off as “the highest-beta growth assets,” and whether this trend represents a short-term rotation or a genuine paradigm shift is the most critical question for 2026.
Full text below:
📈 Market Update — February 23, 2026
BTC remains range-bound between $64k–$67k following the liquidation wave, trading as a high-beta asset with price action increasingly mirroring select blue-chip altcoins. AI disruption and slow deglobalization have become the central questions shaping the 2026 crypto market, with near-term pressure persisting.
Paradigm Shift
Macro
For months, markets have been driven by micro-level catalysts: individual tariff headlines, Fed official speeches, earnings reports—react, reprice, reset to zero. Yet this framework is now breaking down. Citrini’s recent article crystallized a sentiment many investors sensed but had never clearly articulated: we are undergoing a paradigm shift.
The Fed has dominated market direction for much of this cycle—but that is changing. Today’s drivers of asset prices are slower-moving, harder to trade, and won’t dissipate with a single policy pivot. Tariffs aren’t disappearing; AI is disrupting entire industries in real time; growth is slowing while inflation remains sticky. The Fed’s toolkit is becoming increasingly ineffective against these forces, prompting investors to question the “Fed/Trump put”—the very expectation that previously underpinned the outperformance of growth stocks and momentum strategies (crypto excluded).
Two structural trade themes are now operating in parallel—and reinforcing each other:
AI repricing. U.S. FY2025 earnings reports, combined with Anthropic’s recent model release, are forcing the market to reassess AI disruption risk sector-by-sector and in real time. Software moats are being re-evaluated; growth valuation multiples are compressing; even the intensity of hardware capex is being questioned. The “easy” AI trade appears temporarily over—replaced by a messier, more volatile regime.
Deglobalization. Trump’s pivot from IEEPA to Section 122 of the Trade Act following the Supreme Court ruling is the clearest signal yet: tariffs are structural—not temporary. Governments will always find mechanisms. Supply chains continue fragmenting; input costs remain elevated; geopolitical settlement risk is now a permanent feature of asset allocation.
Both drivers attack the same thing: the valuation premium embedded in globally integrated, software-leveraged growth enterprises. Rotation has already gone deep. Gold, commodities, industrials, metals & mining, defense, and energy are all outperforming. Value is working; growth is being sold off. There is zero clarity on rates—and no signal capable of reversing this trend. The Fed cannot cut amid sticky inflation, nor tighten amid slowing growth; this impasse itself *is* the trade.
Digital Assets
BTC has repeatedly failed to break above $70k since the chain reaction of liquidations two weeks ago. The absence of rebound buying interest is more telling than the price range itself. Price action is messy, liquidity thin, ranges narrowing without directional conviction. ETH broke below $1,900 this week—a level more psychologically than technically significant. ETH’s true support zone lies closer to $1,600.
Institutional demand has not returned even after price stabilization—contrasting sharply with prior behavior in the $85k–$95k range, where institutional buying was clearly visible. Derivatives markets corroborate the lack of directional conviction and trading appetite: basis has fallen to multi-month lows; put skew has risen and continues climbing; open interest has declined steadily since October.
Trading desk flow remains skewed to the sell side—but a notable signal emerged midweek: high-net-worth individuals briefly exhibited selective buying interest in altcoins. In an otherwise defensive environment, this was a small but noteworthy spark of confidence—though it faded very quickly.
By late week, conditions turned messy again; any buying intent evaporated rapidly—indicating markets aren’t yet ready to reward early positioning. Marginal activity remains protective, not offensive.
Our View
First slowly—then suddenly. Markets feel like they’re synthesizing disparate narratives into a coherent picture of a paradigm shift.
Right now, crypto assets are being sold off as the highest-beta growth assets—falling alongside tech stocks and momentum strategies—in a world where growth risk premia are rising and the Fed is paralyzed. Persistent ETF net outflows confirm this as the short-term reality.
Zooming out, however, the more interesting question is: how sticky is this paradigm? Narratives around stagflation, deglobalization, and Fed gridlock are beginning to feel less like transient catalysts—and more like a genuine macro re-pricing: a regime favoring hard assets, commodities, and value over growth. Crypto currently sits on the wrong side of this trade.
That said, we’ve seen similar episodes before. Over the past decade, multiple growth panics triggered rotations that ultimately reversed as risk appetite returned and markets rediscovered momentum. What differentiates this episode is the structural nature of AI repricing and deglobalization. Still, it’s too early to declare a full paradigm shift. How sticky this narrative proves to be is the single most important question for the crypto market in 2026—we don’t yet have the answer.
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