Bitcoin News Today: Wintermute's $BTC/ETH Selloff Weighs on Crypto Amid Fed Jitters

Wintermute Accused of Manipulating Market by Dumping $BTC and $ETH

Crypto trading firm Wintermute is facing accusations of manipulating the Bitcoin and Ethereum markets by offloading large volumes ahead of a key Federal Reserve meeting. Critics argue the firm's actions have contributed to recent price declines, with Bitcoin falling below $88,000 and Ethereum slipping under $3,000. The timing of Wintermute's massive sell-offs has sparked concerns among traders, who suspect a coordinated effort to suppress prices and influence market sentiment.

The firm reportedly liquidated over $150 million in long positions, with many traders believing these moves are part of a broader strategy to keep Bitcoin below critical resistance levels. This has led to heightened scrutiny, particularly as the Federal Reserve prepares to meet, with investors closely watching for any rate-cut signals. The broader cryptocurrency market has been volatile, with market capitalization hovering around $3.06 trillion as of late December.

Bitcoin's recent behavior shows signs of consolidation, trading in a range between $87,580 and $90,501. Ether has faced heavier selling pressure, declining nearly 2% over the past 24 hours. Analysts suggest the market remains data-dependent, with the possibility of renewed liquidity optimism if U.S. GDP data comes in softer than expected. The Fear & Greed Index, currently at 29, indicates widespread market fear, reinforcing the bearish sentiment.

How Markets Reacted

Bitcoin's decline has coincided with a broader risk-off environment, with spot ETF outflows continuing to weigh on investor sentiment. Despite Ethereum and XRP seeing ETF inflows, the market remains cautious, with Bitcoin ETFs recording over $142 million in outflows on Monday. The price of Bitcoin currently stands at $87,494, while Ethereum is trading at $2,966, with both assets showing signs of consolidation ahead of potential rate decisions.

The sell-off has also impacted derivatives markets, with Bitcoin options activity showing traders hedging against further downside. Open interest in XRP futures has declined to $3.46 billion, reflecting reduced confidence in the token's ability to hold value. Institutional investors, however, are showing some optimism, as Ethereum ETFs broke a seven-day outflow streak with nearly $85 million in inflows on Monday.

What Analysts Are Watching

Market analysts are closely monitoring the Federal Reserve's policy path, which continues to influence crypto markets. Disinflation is progressing, but at a slower pace, dampening expectations for early or aggressive rate cuts. Delta Exchange analyst Riya Sehgal noted that a softer-than-expected U.S. GDP print could reignite liquidity optimism in early 2026. However, she emphasized that Bitcoin will likely remain rangebound until it breaks above $89,500, with $85,500 serving as a key support level.

The impact of Wintermute's trading strategy is also under scrutiny. While the firm plays a critical role in providing liquidity, some traders argue that its aggressive selling has destabilized the market. Without a formal response from Wintermute, market participants are left to speculate about the firm's intentions. The Federal Reserve's upcoming meeting could provide clarity on the broader economic outlook, which in turn may influence crypto trading activity.

Risks to the Outlook

The U.S. Treasury yield environment has also been shaped by political pressures, with President Donald Trump urging the Federal Reserve to lower interest rates if markets are performing well. Trump's remarks, which included a threat, have added uncertainty to the market. While the Fed is expected to hold rates steady in January, the political climate remains a key variable for both equity and crypto markets.

Regulatory developments in the U.S. and Europe could also impact the market. A new EU regulatory package aims to streamline capital markets and enhance supervision. Meanwhile, the U.S. Senate has yet to vote on the Digital Asset Market Clarity Act, which could establish clearer regulatory guidelines for digital assets. These changes, if enacted, may affect how firms like Wintermute operate in the future.