Wintermute Trader: BTC is stuck between $64-67k, and the market has entered a macro paradigm shift phase

Author: Jjay_dm, Wintermute OTC Trader

Compiled by: Deep Tide TechFlow

Deep Tide Overview: Wintermute is one of the world’s largest crypto market makers. This market update, written on February 23, is currently the clearest description of the current crypto market situation.

It’s not just bullish or bearish; it redefines AI re-pricing, de-globalization, and Federal Reserve dysfunction into a unified framework, clearly pointing out: crypto assets are currently being sold as “the highest beta growth assets.” Whether this trend is a short-term rotation or a true paradigm shift is the most important question to watch in 2026.

Full text below:

📈 Market Update — February 23, 2026

BTC remains range-bound between $64K and $67K after the liquidation wave, trading as a high-beta asset, with price movements increasingly resembling those of blue-chip altcoins. AI disruption and slow de-globalization are driving core issues in the 2026 crypto market, with ongoing short-term pressures.

Paradigm Shift

Macro

For months, the market has been driven by micro catalysts: a single tariff headline, Federal Reserve officials’ speeches, earnings reports. Reactions, re-pricing, resetting to zero. But this framework is breaking down. Citrini’s recent article crystallizes a sentiment many investors have felt but never clearly articulated: we are in a paradigm shift.

The Fed has dominated the market’s trajectory during this cycle, but that is changing. Now, the forces driving asset prices are slower, harder to trade, and won’t dissipate with a single policy shift. Tariffs won’t disappear; AI is disrupting entire industries in real time; growth is slowing while inflation remains sticky. The Fed’s tools are becoming less effective against these forces, leading investors to question the previous support from “Fed/Trump put options”—which had underpinned the outperformance of growth stocks and momentum strategies (excluding crypto).

Two structural trading narratives are running concurrently and reinforcing each other:

AI Re-pricing. The US FY2025 earnings reports combined with recent model releases from Anthropic are forcing the market to underwrite AI disruption risks by industry and in real time. Software moats are being reevaluated, growth valuation multiples are compressing, and hardware capital expenditure is being questioned. The era of easy AI trading seems to be ending, replaced by a more chaotic, volatile environment.

De-globalization. After the Supreme Court ruling, Trump’s shift from IEEPA to Section 122 of the Trade Act is the clearest signal yet: tariffs are structural, not temporary. Governments will always find mechanisms. Supply chains continue to fragment, input costs remain high, and geopolitical settlement risks are now a permanent feature of asset allocation.

Both drivers target the same core: the valuation premium embedded in globally integrated, software-leveraged growth companies. Rotation has gone quite deep. Gold, commodities, industrials, metals and mining, defense, and energy are outperforming the broader market. Value styles are effective, while growth stocks are being sold off. There’s no clear signal to reverse this trend in interest rates; no indication that the Fed can cut during sticky inflation or tighten during slowing growth—this deadlock itself defines the entire trading logic.

Digital Assets

Since the liquidation chain reaction two weeks ago, BTC has repeatedly failed to break above $70K. The absence of buy-side rebounds says more than the price range itself. Price action is chaotic, liquidity thin, ranges narrowing, and directionless. ETH fell below $1,900 this week, a level more psychologically significant than technically. The key support level for ETH is around $1,600.

Institutional demand has not returned after prices stabilized—this contrasts sharply with the $85K-$95K range, where institutional buying was quite evident. The derivatives market also confirms a lack of directional conviction: basis spreads are at multi-month lows, bearish skew is rising and still climbing, and open interest has been declining since October.

Trading desk flow favors selling, but a noteworthy signal appeared midweek: high-net-worth individuals showed a brief, selective willingness to buy altcoins. In this overall defensive environment, it’s a small but notable spark of confidence—though it faded very quickly.

Later in the week, chaos returned, and any buying interest quickly evaporated, indicating the market is not yet ready to reward early positioning. Marginal operations remain protective rather than offensive.

Our Judgment

Slow then sudden. The market seems to be integrating various narratives into a picture of a paradigm shift.

Currently, crypto assets are being sold as the highest beta growth assets—falling along with tech stocks and momentum strategies—and the world is characterized by rising growth risk premiums and Fed paralysis. Continuous ETF outflows confirm this as a short-term reality.

But from a broader perspective, a more interesting question is: how sticky is this paradigm? The narratives of stagflation, de-globalization, and Fed deadlock are starting to feel less like short-term catalysts and more like a real re-pricing of macro fundamentals—a landscape favoring hard assets, commodities, and value rather than growth. Crypto is currently on the less favored side of this trade.

That said, we’ve seen similar situations before. Over the past decade, rotations triggered by growth fears ultimately reversed as risk appetite returned and markets regained momentum. What’s different this time is the structural nature of AI re-pricing and de-globalization. But it’s still too early to call this a true paradigm shift. How sticky this narrative is remains the most important question for crypto in 2026—we don’t have an answer yet.