Bitcoin fell below $80,000 on February 9, erasing the gains it had built after Donald Trump’s November 2024 election win. In its market update, Wintermute said a large unwind of leverage built during months of consolidation drove more than $2.7 billion in liquidations. Bitcoin briefly touched $60,000 before rebounding into the low $70,000s. The firm said the asset is now trading about 50% below its October all-time high of $126,000.
Macro shocks triggered a delayed risk-off move
Wintermute linked the selloff to several events landing in quick succession rather than a single catalyst. The list included Warsh’s nomination for Federal Reserve chair on January 30, weak earnings from the Magnificent Seven, and a steep correction in precious metals. Microsoft shares fell 10%, while silver dropped 40% in three days. Markets did not react all at once. The shift came later, then risk positions were cut across the board and the period of compressed volatility ended in a sharp washout.
U.S. spot selling stayed in control throughout the decline
Spot market signals pointed to steady selling pressure from the United States. Wintermute said the Coinbase premium stayed negative during the entire move, a sign that domestic demand did not absorb the drop. The firm’s internal OTC data showed heavy selling from U.S. counterparties through the week. That left spot demand weak at the same time prices were already under pressure.
ETF redemptions added supply as IBIT volume surged
ETF activity remained central to price formation. IBIT traded more than $10 billion in notional volume on Thursday, highlighting how large spot Bitcoin ETFs have become in the market structure. But redemptions also meant forced selling into a falling tape. Since November, spot Bitcoin ETFs have posted about $6.2 billion in cumulative net outflows, the longest outflow streak since launch. Wintermute said IBIT stood out as both the largest holder and the biggest source of incremental supply during redemptions.
Capital rotation into AI stocks drained crypto liquidity
Wintermute also said capital continued rotating into artificial intelligence stocks, pulling liquidity away from crypto. A widely shared chart showed Bitcoin moving closely with software equities, yet AI-related names captured most of the available capital. The firm added that spot demand is likely to remain limited until ETF flows turn positive again and the Coinbase premium moves back above zero. Stress was also visible in derivatives, where IBIT and Deribit now account for nearly half of crypto options activity.