Crypto Market Consolidates as Funds Rotate to BTC and ETH After $2B Liquidations: Wintermute

The crypto market is trying to regain its footing after a brutal wave of liquidations wiped out more than $2 billion in leveraged positions, according to market-making firm Wintermute. The sudden flush forced traders to unwind risk aggressively, sending altcoins tumbling while driving liquidity back into the two assets investors trust most during volatility — Bitcoin and Ethereum.

Wintermute says this rotation isn’t a sign of panic but a classic “flight to quality.” When leverage gets cleared out and funding turns unstable, traders tend to abandon speculative tokens and retreat to assets with the deepest liquidity and strongest institutional support. That’s exactly what’s happening now: capital is consolidating around BTC and ETH as investors wait for market conditions to stabilize.

Bitcoin briefly dipped under pressure but remains structurally strong, buoyed by ETF inflows and expectations that macro conditions could ease in the coming weeks. Ethereum, meanwhile, is benefiting from improving sentiment tied to network upgrades and increasing open interest.

Altcoins, however, are still in recovery mode. Many projects saw double-digit declines as liquidity evaporated during the liquidation cascade.

According to Wintermute, once the market digests this reset, the next leg higher will likely depend on whether fresh capital returns — not just recycled flows between top assets. For now, the market is cautious, defensive, and focused on safety until volatility settles.