Wintermute Says Crypto Rebound Is Relief Rally, Bull Market Call Premature

Market maker Wintermute said it is too early to treat the recent rebound in cryptocurrencies as the start of a full-fledged bull market.

In a post on X on July 7, Wintermute wrote that risk assets bounced as signs of a slowdown in the U.S. economy, expectations for Federal Reserve policy easing and easing tensions in the Middle East converged. Still, it said the latest move is better viewed as a relief rally than a structural bull market until capital flows across the broader market show sustained improvement.

Most risk assets advanced after key U.S. macroeconomic data released last week eased inflation concerns. Ether rose 13.54% from a week earlier, while Bitcoin gained 6.75%.

Wintermute said Bitcoin's rise appeared relatively resilient. Its report said whale investors accumulated more than 270,000 Bitcoin near the 200-week moving average, while in the options market demand for downside protection shifted to purchases of call options with strike prices from $60,000 to $70,000.

Still, the firm said spot exchange-traded fund flows bear watching. U.S. spot Bitcoin ETFs recorded net inflows of $221.7 million on July 2, ending a run of net outflows that had lasted 10 trading days, according to the report. But a single day of inflows is not enough to declare a trend reversal, it added. Cumulative net outflows for the year still total about $5.4 billion.