Quick Breakdown
- BOJ rate-hike concerns triggered broad crypto deleveraging, pushing BTC down $4K amid thin liquidity.
- Market leverage and funding rates normalized, with perpetual open interest falling from $230B to $135B.
- Spot trading gained share and depth improved, setting the stage for potential consolidation once macro stabilizes.
Crypto markets experienced a sharp reset following signals from the Bank of Japan (BOJ) that a rate hike at its December 19 meeting is under active consideration. According to Wintermute, the announcement erased last week’s tentative stabilization, triggering widespread deleveraging across major digital assets while reinforcing spot market participation.
— Wintermute (@wintermute_t) December 2, 2025
Macro shock sends BTC lower amid low liquidity
Bitcoin (BTC) had shown signs of recovery over the Thanksgiving period, climbing steadily from the mid-$80,000s to the low-$90,000s as retail flows improved and institutional activity turned positive. However, the BOJ’s hawkish signal immediately disrupted markets.
The potential rate hike impacts global funding markets by compressing the yen carry trade, a mechanism that influences leveraged positions across multiple asset classes, including cryptocurrencies. BTC fell roughly $4,000 before European markets opened, highlighting the outsized eimpactof thin liquidity In contrast, gold rallied during the unwind, underscoring that cryptocurrencies remain vulnerable during macro-driven risk-off events.
Wintermute noted that while BTC’s “digital gold” narrative holds in stable conditions, traditional safe havens continue to dominate during genuine macro stress episodes.
Market structure shows signs of recovery
Despite the sell-off, underlying crypto market conditions are improving. Leverage has been significantly reduced, funding rates across major cryptocurrencies have normalized, and total perpetual open interest has fallen from roughly $230 billion in early October to $135 billion. Spot trading has taken a larger share of volume, and market depth has remained resilient even during holiday periods.
These adjustments suggest that the market is structurally healthier, providing a foundation for potential consolidation once macro conditions stabilize. While major cryptocurrencies are currently moving in line with broader macro trends, smaller-cap tokens continue to display only temporary, idiosyncratic gains before broader market dynamics prevail.
Meanwhile, Wintermute CEO Evgeny Gaevoy has denied reports that the firm plans to sue Binance following the October 10 market crash, which erased roughly $20 billion in leveraged positions.
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