“An altcoin rally depends on Bitcoin,” stated market maker Wintermute, even as market tone has improved and positioning has reset. In its latest analysis, the trading firm noted that after the October “washout,” sentiment is less fragile and selective risk is returning. However, they warned that market breadth remains “extremely narrow” and that capital flows do not yet support a widespread rally.
Typically, Wintermute explains that altcoins tend to underperform when Bitcoin is trading between 10% and 20% below its ATH, which is the current situation. This explains why recent rallies in specific sectors (like DePIN or AI) have been fragile and faded quickly. Although confidence is returning, capital is sticking to the majors, and breakout narratives feel “forced” and lack follow-through.
Wintermute maintains that, looking forward, it is necessary for the majors (BTC and ETH) to lead the recovery before capital flows into altcoins. Although the macroeconomic backdrop is favorable, Wintermute identifies the next key volatility driver not in the market, but in politics. Investors must closely watch the “upcoming U.S. regulatory and political headlines,” which could define the next stage of the cycle.
Source: https://x.com/wintermute_t/status/1988178068373205504
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