Bitcoin struggles under $70K as shrinking open interest and defensive positioning reflect fading institutional appetite.
Bitcoin continues to trade below $70,000 as broader macro pressures weigh on risk assets. Recent liquidation events pushed the OG coin into a tight $64,000–$67,000 range, where it now moves with limited conviction. According to Wintermute, current price action goes beyond short-term positioning.
Capital Rotates Into Defensive Sectors as Structural Pressures Build
Market update by Wintermute shows Bitcoin behaving like a high beta asset, closely tracking large-cap altcoins and tech-sensitive trades. Momentum seen earlier in the cycle has faded. Near-term pressure persists as structural macro forces replace headline-driven volatility.
For much of the past year, markets reacted to micro catalysts. Tariff headlines, Fed comments, and earnings reports drove rapid repricing. That pattern appears to be breaking down as Wintermute points to a broader shift now shaping asset allocation decisions.
https://t.co/QHDUNkrAxA
— Wintermute (@wintermute_t) February 24, 2026
Federal Reserve policy no longer carries the same influence over markets as in prior cycles. Inflation remains persistent while economic growth shows signs of slowing. Rate cuts have also added further inflation pressure. As a result, confidence in a dependable “Fed put” has weakened.
Investors now demand higher risk premiums to hold growth-focused assets. At the same time, two structural themes are reinforcing this shift.
First, there is a shift in how investors value companies driven by artificial intelligence. In simple terms, markets change their pricing of stocks based on new views about AI’s impact. Strong fiscal earnings and recent model releases from Anthropic prompted investors to reassess disruption risk across sectors.
Software companies once viewed as secure are seeing valuation pressure as competitive advantages are questioned. Hardware firms face scrutiny over rising capital expenditures and uncertain returns. What was previously a broad AI-driven rally has given way to greater volatility and sharper sector rotation.
Second comes deglobalization, which means countries are trading less freely and relying more on domestic production. Following a Supreme Court ruling, the administration pivoted from IEEPA to Section 122 to maintain tariff authority.
Wintermute interprets this as confirmation that tariffs are not temporary. Fragmented supply chains, higher input costs, and geopolitical risk now factor into long-term asset pricing.
Both themes put pressure on large global growth companies that depend on open trade and strong global demand. At the same time, unclear interest rate direction adds to market uncertainty, leaving investors without a clear policy signal to rely on.
Options Market Prices in Downside Risk
Digital assets sit on the wrong side of the current market rotation for now. Bitcoin has failed to reclaim $70,000 on multiple attempts since a liquidation cascade two weeks ago. The absence of a strong recovery bid carries more weight than the range itself.
Meanwhile, Ethereum dropped below $1,900 during the week. While largely psychological, that level signals weakening sentiment. Wintermute identifies $1,600 as a more critical technical area should downside extend.
Institutional demand shows limited improvement despite price stabilization. When Bitcoin previously traded between $85,000 and $95,000, institutional activity was much stronger.
Futures premiums are low, meaning traders are not aggressively betting on higher prices. Options data shows more demand for downside protection. Open interest has been falling since October, which suggests positions are being reduced rather than expanded.
On the other hand, trading desks are seeing more selling than buying. Some high-net-worth investors tried to buy a few altcoins mid-week, but that interest did not last. Most activity is focused on hedging and protecting positions, not betting strongly on a price rebound.
Funds are also leaving Bitcoin ETFs, which adds more pressure. Right now, Bitcoin is trading like a high-risk tech stock in a market that favors gold, commodities, and value stocks. As such, crypto appears less attractive. Uncertainty around policy and the economy is also hurting sentiment.
Wintermute points out that similar growth scares happened before and were later reversed. In past cycles, risk appetite returned once macro fears subsided. However, AI disruption and deglobalization may be longer-term forces, making comparisons harder.
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