Wintermute: If Bitcoin's cyclical trend is similar, it may drop to the mid-high range of $50,000

Market maker Wintermute's latest market weekly report indicates that the ratio of btc-42">Bitcoin perpetual contract trading volume to spot trading volume has risen to 15 times, while the funding rate volatility has dropped to a low point in this cycle, showing that market leverage is high but there is insufficient directional consensus. The current structure is closer to "compression and accumulation," or brewing significant unilateral volatility.

Wintermute believes that if geopolitical tensions ease and oil prices fall back to around $100, short positions will face the risk of being squeezed to between $70,000 and $74,000. If the situation continues to ease, the resistance level at $74,000 may be tested.

Conversely, if the situation escalates further and oil prices rise to $120, oil prices could drop to just above $60, and if the cyclical trend is similar, it could fall to the mid-high $50,000 range. More macro-wise, the directionality here is not important; what matters is the market structure itself. The leverage on futures contracts is high, capital flows are fluctuating within the narrowest range ever recorded, and volatility is also narrowing.

Regarding which direction the catalysts ultimately develop, the market structure indicates that the resulting volatility will far exceed the levels currently reflected in spot, futures, and options prices.