Wintermute: Market structure is improving, major tokens are no longer so fragile

ChainCatcher News, Wintermute released a market report stating that expectations of an interest rate hike by the Bank of Japan have completely erased last week's period of stability and triggered widespread deleveraging. The market structure has been thoroughly reset: leverage has dropped significantly, funding rates have returned to neutral, and spot market participation has increased markedly. Everything is now trading according to macro logic, but the major currency pairs no longer appear as fragile.

From a market structure perspective, conditions are actually improving: the basis has fallen to a cycle low, with bitcoin's 90-day annualized basis close to 4% to 5%, and ethereum near 3% to 4%, reflecting a continued increase in leveraged long positions. The total open interest in perpetual contracts has dropped from about $230 billions in early October to around $135 billions currently, clearing out a large amount of excess leverage and reducing the likelihood of further mechanical liquidations. The proportion of spot trading volume has increased, and considering the impact of the Thanksgiving holiday, the depth of spot supply is also better than expected. Lower leverage, negative funding, and healthier spot participation are usually what the market needs before it can reorganize after macroeconomic stability returns.