Wintermute: Market Structure is Improving, Mainstream Tokens are No Longer as Fragile

On December 2, crypto liquidity provider Wintermute released a market report noting that Bank of Japan (BOJ) rate hike expectations have fully erased last week’s stable market conditions and triggered widespread deleveraging. The market structure has been cleanly reset: leverage has dropped sharply, funding has returned to neutral, and spot participation has risen markedly. While trading now hinges on macro logic, major currency pairs no longer look as fragile. From a structural standpoint, conditions are actually improving: Basis levels have fallen to cyclical lows—Bitcoin’s 90-day annualized basis is around 4-5%, Ethereum’s 3-4%—reflecting ongoing accumulation of leveraged long positions. Total open interest (OI) for perpetual contracts has declined from ~$230 billion in early October to ~$135 billion currently, clearing excess leverage and reducing the risk of further cascading liquidations. Spot trading volume share has increased, and despite the Thanksgiving holiday impact, spot market depth has been better than expected. Lower leverage ratios, negative funding rates, and healthier spot participation are typically prerequisites for a market reconsolidation following macroeconomic stabilization.