Wintermute: Market's Ability to Recover in 2026 Hinges on Three Key Factors, Market in Desperate Need of FOMO Injection
BlockBeats News, January 14th, Wintermute, a cryptocurrency market maker, analyzed in its digital asset OTC market review: The 2025 traditional four-year cycle performance of Bitcoin is weak, and the altcoin cycle has almost disappeared. This is not a temporary adjustment but a structural change. Therefore, for the crypto market to truly rebound strongly in 2026, it highly depends on the following three key outcomes, with at least one of them needing to occur:
ETFs and Crypto Treasury (DAT) companies will expand their investment scope beyond Bitcoin and Ethereum. Currently, the US spot BTC/ETH ETF has highly concentrated liquidity on a few large-cap tokens, leading to a narrower market breadth and severe performance differentiation. Only when more coins are included by institutions through ETFs or corporate treasuries, is it possible to restore broader market participation and liquidity.
Major assets such as BTC, ETH, BNB, SOL, etc., show strong performance again, generating widespread wealth effects. The 2025 traditional "BTC rise followed by capital flow into altcoins" cycle has fundamentally broken. The average uptrend cycle for altcoins is only about 20 days (compared to around 60 days the previous year), with most tokens experiencing continued declines due to unlocked selling pressure. Only when the top assets surge again can the capital potentially overflow downwards, triggering an altseason.
Retail investors' attention returns to the crypto market. Currently, retail investors are still actively involved in the market, but their funds are mainly allocated to dollar-cost averaging into the S&P 500, AI, robotics, quantum computing, and other high-growth themes. The painful memories of 2022-2023 (plunges, bankruptcies, liquidations) combined with crypto's underperformance compared to the traditional stock market in 2025 have greatly reduced many people's attraction to the "get-rich-quick" allure of crypto. Only with a large-scale return of retail investors can the market regain its fervent momentum.
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