Just found out that market maker Wintermute issued a warning about the market two days ago. Usually, they have access to exchange and big client data, so their insights are pretty reliable. Here’s what they think: 1. Bitcoin is still heavily influenced by the US stock market, with a very high correlation. When the stock market drops, BTC tends to drop even harder. But when the stock market rises, BTC doesn’t follow as much. In simple terms, it’s more ‘follow the drop, not the rise.’ 2. The last time we saw this phenomenon was in 2022, when the market turned bearish. 3. This has led to a more bearish sentiment for BTC compared to the stock market. The market reacts much more strongly to pessimism than optimism. 4. Looking ahead for the year, they believe that most of the new funds that should have flowed into the crypto space have instead gone to the stock market, further solidifying the stock market as the key indicator. 5. In conclusion, they think stablecoin issuance has stabilized, traditional ETF inflows have slowed, and the market depth on exchanges hasn’t recovered to early 2024 levels (which is why exchanges have been laying off staff this year). 6. Despite all this, they still believe BTC will hold up relatively well during this downturn, having only pulled back about 20% from its peak.