Wintermute: The market structure is improving, and mainstream tokens are no longer so fragile

Wintermute released a market report indicating that the expectations of interest rate hikes by the Bank of Japan have completely erased last week's stability and triggered widespread deleveraging behavior. The market structure has been cleanly reset: leverage has significantly decreased, liquidity has returned to neutral, and spot participation has notably increased. Everything is now trading according to macro logic, but the major currency pairs no longer seem as fragile.

From the perspective of market structure, the situation is actually improving: the basis has fallen to a cyclical low, with Bitcoin's 90-day annualized basis close to 4% to 5%, and Ethereum's close to 3% to 4%, reflecting a sustained increase in leveraged long positions. The total open interest of perpetual contracts has decreased from about $230 billion in early October to about $135 billion currently, clearing a significant amount of excess leverage and reducing the likelihood of further mechanical liquidations. The proportion of spot trading volume has increased, and considering the impact of the Thanksgiving holiday, the depth of spot supply is also better than expected. Lower leverage, negative funding, and healthier spot participation are typically what is needed before the market re-establishes itself after macroeconomic stability.