Bitcoin Downtrend: Wintermute Research Released

Recently, the high correlation of Bitcoin (BTC) with stocks has attracted attention. The correlation between Nasdaq and Bitcoin has reached 0.8 again, indicating that declines have a negative impact on prices. A new report published by Wintermute emphasizes that this high correlation will only be downward.

According to the report, Bitcoin does not react sufficiently when stocks rise and reflects its losses more sharply when Nasdaq declines. This situation is taking shape in an environment where capital flowing into the crypto market and narratives have recently shifted towards U.S. stocks. Wintermute points out the negative effects of the current market structure on crypto assets and particularly highlights the liquidity contraction observed in the spot market. This makes price reactions more fragile.

Historical data reveals that similar correlation behaviors occur at market low points. Wintermute reminds us that in the past, such a situation generally stemmed from investor exhaustion and occurred during a 'quiet' period rather than excessive optimism. The downward correlation in Bitcoin signals a situation where investors' risk appetite has shifted in favor of stocks.

The report indicates that the market is in search of new catalysts for a potential recovery alongside the values it has lost and the dip signals. Investors are increasingly inclined to take positions again after a negative period. However, the current situation is regarded more as a picture indicating decline areas rather than a dangerous peak.