Wintermute Bullish on Crypto as Macro Winds Shift

Wintermute’s analysis identifies a decisive shift in macroeconomic conditions that has reset market positioning and liquidity into what the firm characterizes as a “friendlier Q4 regime.” The catalyst for this change stems from two primary developments: softer-than-expected US inflation data and improving relations between the United States and China. The Consumer Price Index reading of 3.0% year-over-year, coming in below the 3.1% expectation, signaled cooling inflationary pressures that have bolstered expectations for a more dovish Federal Reserve stance.

Simultaneously, the announcement of a summit between former President Donald Trump and Chinese leader Xi Jinping in Seoul has contributed to what Wintermute describes as “stabilizing” geopolitical tensions. These developments triggered a broad market rebound, with the S&P 500 gaining 1.9%, the VIX volatility index hovering around 16, and Treasury yields easing as rate-cut expectations firmed ahead of this week’s Federal Reserve meeting. This combination of factors has created what Wintermute frames as “macro tailwinds” that are beginning to translate into fresh capital inflows across risk assets.

In the crypto sphere, Bitcoin spearheaded the recovery with a 5.3% gain that pushed the digital asset above $115,000. Wintermute’s analysis highlights that this move was “amplified by $160 million in short liquidations,” creating a powerful squeeze effect that accelerated upward momentum. The firm specifically noted that Ethereum tracked higher toward $4,200, demonstrating broad-based strength across major digital assets.

Critical to Bitcoin’s resurgence has been the consistent demand from US spot Bitcoin ETFs, which Wintermute describes as continuing to “anchor the structure even as activity cooled.” The firm observed that these ETFs “absorbed moderate inflows through the week even as volumes thinned, underscoring sticky structural demand.” This persistent institutional interest provides a foundational support level for Bitcoin even during periods of reduced retail participation, creating what Wintermute characterizes as a healthier market structure with “cleaner leverage and more balanced funding.”

Beneath the surface of major asset moves, Wintermute observed significant sector rotation that signals genuine risk appetite returning to crypto markets. The firm highlighted that “DeFi and AI names led gains on strong protocol revenue prints and improving on-chain activity,” while “Utilities and Tooling benefited from infrastructure-related rotation as new L2 deployments and restaking primitives drew liquidity.” This broadening participation beyond just Bitcoin and Ethereum indicates a maturation of the recovery beyond simple momentum chasing.

Market structure improvements were evident across multiple dimensions. Wintermute noted that “stablecoin supply is ticking higher for the first time since September,” providing concrete evidence that macro tailwinds are translating into actual capital inflows. On the derivatives front, “funding rates turned positive again across most majors… though positioning remains far from crowded,” suggesting room for additional leverage buildup without immediate overextension concerns. The simultaneous decline in gold, which “unwound nearly 7% from its highs,” further corroborates the rotation from defensive assets into risk assets that Wintermute identified.

Wintermute’s outlook for the remainder of the year is unambiguously constructive, leaning on both current market conditions and historical seasonality patterns. The firm explicitly stated that “while Uptober had a bit of a false start, macro tailwinds, cooling inflation, ‘stabilizing’ geopolitical tension and a dovish FED are setting the stage for a supportive rest of the year.” This perspective is bolstered by the historical precedent that Q4 “has been the strongest for Bitcoin,” creating a favorable confluence of technical, fundamental, and seasonal factors.

The firm’s closing summary reinforces this optimistic stance, noting that “positioning is cleaner, volatility subdued, and capital rotation is gradually steering toward crypto.” With “liquidity conditions improving and sentiment stabilising,” Wintermute concludes that “the setup into Q4 remains constructive, favouring further risk-on continuation.” Market commentators immediately amplified this message, with DeFi analyst Ignas compressing Wintermute’s analysis into the trading takeaway that the market maker is “telling you to max bid” given the improving conditions across yields, volatility, and ETF-driven price action.