Bitcoin has erased all gains recorded since Donald Trump’s U.S. presidential election victory in November 2024, marking a sharp reversal in market sentiment after months of sustained optimism.
According to Wintermute, the selloff accelerates over the weekend as excess leverage unwinds and U.S.-based selling pressure dominates flows.
BTC briefly falls below the $80,000 level for the first time since April 2025 and momentarily tags $60,000, its lowest price point in months. The move wipes out the entire post-election rally and leaves Bitcoin down roughly 50% over a four-month period, making it the steepest drawdown since 2022.
The decline unfolds quickly and violently. More than $2.7 billion in leveraged positions are liquidated over the weekend, flushing out traders who positioned aggressively for continued upside. Wintermute describes the move as a decisive reset rather than a routine correction, with price action reflecting the absence of real demand rather than temporary panic.
U.S. Capital Drives The Selloff
Data highlighted by Wintermute shows that U.S. capital sits at the center of the downturn. The Coinbase Premium Gap, often used as a proxy for U.S. spot demand, remains consistently negative since December, signaling that American investors are selling rather than accumulating.
This persistent negative premium reinforces the idea that the decline is not driven by offshore leverage alone but by spot-led selling pressure from the world’s largest capital market. Without U.S. buyers stepping in, downside momentum accelerates and support levels fail rapidly.
Spot Bitcoin ETFs amplify this pressure. Since November, these products record cumulative net outflows of $6.2 billion, marking the longest sustained outflow streak since ETFs launched. What once acted as a powerful demand engine during Bitcoin’s rally now becomes a net source of supply.
IBIT, the largest spot Bitcoin ETF, plays a central role in this shift. While it remains the single largest institutional holder of BTC, it also emerges as one of the most significant sellers during the downturn, contributing directly to available market supply at a time when demand weakens.
Wintermute summarizes the situation clearly: the same institutional flows that powered the rally are now absent, leaving the market without its strongest structural bid.
Three Triggers Hit At Once
The sharp downturn does not occur in isolation. Wintermute identifies three major triggers hitting the market simultaneously, compounding downside pressure and accelerating risk-off behavior.
First, the appointment of Warsh as U.S. Federal Reserve Chair injects renewed uncertainty into monetary policy expectations. Markets reassess the future path of rates and liquidity, reducing appetite for high-beta assets like crypto.
Second, weak earnings from Big Tech weigh heavily on risk sentiment. Microsoft’s stock drops roughly 10%, sending shockwaves through growth-oriented portfolios and triggering broader de-risking across tech-linked assets.
Third, precious metals experience a sudden crash. Silver plunges approximately 40% in just three days, undermining the narrative of inflation hedges and safe-haven assets. The collapse forces traders to reassess cross-asset correlations and unwind positions across multiple markets simultaneously.
Together, these three forces hit crypto at its weakest moment, just as leverage builds, ETF flows turn negative, and U.S. demand disappears.
Institutions Exit As Losses Mount
Institutional investors, once the backbone of Bitcoin’s rally, step back decisively. Wintermute notes that institutions that drove the upside earlier in the cycle are now largely gone, leaving price discovery to thinner, more volatile markets.
Public companies holding Bitcoin face mounting pressure as well. These firms now sit on approximately $25 billion in unrealized losses, with BTC trading below their average purchase prices. As balance sheet stress increases, the incentive to hold weakens, raising the risk of additional supply entering the market.
At the same time, derivatives markets reflect bearish positioning. Crypto assets display a clear bearish skew, suggesting traders expect continued volatility rather than a quick recovery. The basis remains unstable, reinforcing the lack of conviction among both long-term and short-term participants.
Wintermute’s assessment points to a market transitioning from institutional accumulation to defensive positioning, where capital preservation takes precedence over upside exposure.
Capital Rotates Toward AI As Crypto Lags
While crypto struggles, capital finds a new home. Wintermute highlights a clear rotation into AI-themed equities, which continue to attract inflows even as digital assets bleed.
Bitcoin’s price action increasingly mirrors that of S&P 500 software and AI-exposed stocks. When AI names rally, BTC stabilizes. When AI weakens, crypto follows. Wintermute notes that if AI stocks are removed from the Nasdaq, much of crypto’s apparent underperformance disappears, underscoring how tightly linked the two trades have become.
This correlation leaves crypto vulnerable. As long as AI remains the dominant growth narrative, speculative capital stays parked in equities rather than rotating back into digital assets. Microsoft’s weak earnings print may mark the beginning of fatigue in the AI trade, but Wintermute cautions that this alone is not enough to revive crypto demand.
Until AI enthusiasm cools meaningfully, Bitcoin’s upside remains capped.
A detailed breakdown of these dynamics was shared publicly by Wintermute and can be viewed here.
— Wintermute (@wintermute_t) February 10, 2026
Volatility Ahead Without Real Demand
Wintermute’s conclusion is blunt. Without a return of real demand, Bitcoin is unlikely to stage a sustained rebound. A recovery requires multiple conditions to align: Coinbase premiums must turn positive, spot ETF flows must reverse, and the basis must stabilize.
Absent these signals, the market faces a prolonged period of chop and elevated volatility rather than a clean directional trend. Short-term bounces may occur, but they lack structural support and risk fading quickly.
The weekend liquidation wave flushes excess leverage, but it does not solve the underlying demand problem. With U.S. sellers dominant, institutions sidelined, and capital focused elsewhere, Bitcoin trades in a fragile equilibrium.
For now, the post-election narrative is officially over. The market resets, volatility rises, and patience becomes the primary strategy. Until capital returns with conviction, crypto remains caught between uncertainty and exhaustion, moving fast, but going nowhere.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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