Wintermute, one of the largest market makers in the cryptocurrency market, released an analysis suggesting Bitcoin's decline may continue further, with a true bottom potentially not arriving until September or October. Bitcoin has fallen from $126,000 in October to $58,000. Wintermute attributes the ongoing decline to AI stock sell-offs, high interest rate expectations, weakening corporate capital flows, and geopolitical tensions between the US and Iran. The firm stated the bear market has entered its final stages but remains ongoing, with the true bottom not yet confirmed.
Wintermute Identifies Supply Loss Metrics Approaching Historical Cycle Lows
Wintermute's analysis noted that the percentage of Bitcoin supply held at a loss is approaching the 50% level, surpassing the share held at a profit. The firm stated: "Historically, this level has marked cycle lows two to three quarters in advance."
The analysis pointed out that in previous cycles, this intersection occurred closer to 60%. Wintermute stated: "So, surrender is happening. The key point is that in previous cycles, this intersection occurred closer to 60%, therefore more suffering may be experienced." The firm indicated this historical pattern suggests room for further decline remains.
Analysis Cites AI Stock Sell-Offs and Geopolitical Tensions as Negative Factors
Wintermute analysts noted that the months-long rally in AI stocks has given way to sharp sell-offs. According to the analysis, these sell-offs, coupled with high interest rate expectations and weakening corporate capital flows, are dragging down the cryptocurrency market.
The firm also stated that ongoing tension between the US and Iran, combined with a lack of positive news from the macroeconomic front, negatively impacted the market. Wintermute concluded that a bottoming out during the low-volume summer months is unlikely.
Wintermute Lists Employment Data and Technical Levels as Key Variables
Wintermute identified several variables for investors to monitor at this point. The firm listed the US employment report, Bitcoin's 200-week moving average, whether the $58,000 level will be held, and STRC's trading flow as key factors.
According to Wintermute, investors should monitor continued weakness into September-October. The firm stated any subsequent recovery depends on the slowdown in the rise of AI and changes in the macroeconomic environment.
FAQ
What does Wintermute predict about Bitcoin's price bottom?
Wintermute's analysis suggests the true bottom for Bitcoin may not come until September or October. The firm stated the bear market has progressed significantly and entered its final stages, but is still ongoing, with the true bottom not yet confirmed.
Why does Wintermute believe Bitcoin could decline further?
Wintermute cited several factors: the percentage of supply held at a loss is approaching 50% (historically 60% marked cycle lows), AI stock sell-offs coupled with high interest rate expectations, weakening corporate capital flows, and ongoing US-Iran tensions. The firm noted that in previous cycles, the supply-loss metric intersection occurred closer to 60%, suggesting more decline may be experienced.
What variables does Wintermute recommend monitoring?
Wintermute identified four key variables to watch: the US employment report, Bitcoin's 200-week moving average, whether the $58,000 level will be held, and STRC's trading flow. The firm stated any recovery depends on the slowdown in AI stock rises and changes in the macroeconomic environment.
