Bitcoin bottom hasn’t likely arrived yet as Wintermute argues that crypto is still missing flow support and macro relief.
Bitcoin may still be too early to call a bear-market bottom because crypto now has several late-cycle stress signals, but crypto market maker Wintermute says the setup remains incomplete without fresh buying from whales.
In an X post, Wintermute pointed out that the crypto selloff coincided with the end of the AI trade, as the Nasdaq fell 4.5% for the fifth consecutive day, while chip stocks were especially battered, suffering a 7% plunge in one day.
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In the crypto realm, the catalysts for selling include high rate fears for a prolonged period after the rise of PCE to 4.1% in May, the highest since 2023, and the dollar rising to one-year highs at 101. As Wintermute noted, the crypto market has thus “advanced in the bear, but likely not the bottom.”
Bitcoin Bottom Still Needs Flows
Now, Wintermute points out that crypto sentiments appear to be washed up, with Fear & Greed Index resting close to extreme fear levels. On top of that, the percentage of BTC▼$58,875.00 supply that is underwater approaching previous low levels observed during cycles.
But as the firm argues, capitulation alone isn’t enough for Bitcoin’s revesal, since there’s no buying pressure from ETFs and OTC desks. As Bitcoin Foundation reported earlier, June was the worst month for spot Bitcoin ETFs since their January 2024 launch, with SoSoValue data showing more than $4.5 billion in net outflows.
Michael Saylor’s Bitcoin treasury giant Strategy is also another sign of stresses in the current cycle. Wintermute said MSTR’s premium to its Bitcoin holdings compressed toward 1.0x, while STRC, its preferred stock, hit an all-time low near $72 before the company announced a new path, allowing it to sell more than $1 billion in Bitcoin.
Wintermute called the move right for Strategy because it reduced disorderly-blowup risk. But the firm added that the broader signal is less clean:
“But step back and a Bitcoin treasury company now reserving the right to sell Bitcoin to cover its dividends tells you something about where we are in the cycle. The permanent bid is becoming a conditional one.”
Hence, Wintermute believes that the more likely path is more pain into September or October, with the next tests coming from payrolls and whether BTC can defend the 200-week moving average under Strategy’s new investment approach.
Read more: Bitcoin ETFs Lose $7.7B in Seven Straight Weeks — Worst Month on Record
