Giant Market Maker Wintermute Explains the Reason for Bitcoin's Sudden Drops! "The Last Time It Happened Was in 2022!"

Although Bitcoin (BTC) fell below $100,000 in November, it experienced a rapid recovery. However, Bitcoin is showing signs of fatigue and weakness despite trading above the psychological $100,000 level. This reflects a challenging and unstable performance for the cryptocurrency.

While many reasons were cited for this weakness, Wintermute highlighted Bitcoin's high correlation with the Nasdaq. According to Wintermute analyst Jasper De Maere, BTC is more sensitive to Nasdaq declines, reacting more sharply to market downtrends than upswings.

Wintermute's latest analysis reveals that Bitcoin still maintains a high correlation of 0.8 with the Nasdaq. Analyst Maere explained that BTC reacts more slowly to rises in the Nasdaq but is particularly sensitive to corrections, which aligns with a bearish trading bias. This behavior underscores Bitcoin's vulnerability during periods of market correction.

Maere noted that this sensitivity might actually be a bottom signal for Bitcoin. He explained that Bitcoin tends to fall more sharply on down days than it rises on good days. When stocks rise, Bitcoin's response is typically weaker. This pattern, referred to as the negative performance curve, was last observed during the 2022 bear market.

At this point, Maere stated: "This pattern is usually observed at the bottoms, not the tops." This is not investment advice.