Crypto Selling Pressure Near Exhaustion, But Bull Market Chances Slim
The cryptocurrency market is showing signs of exhaustion from selling pressure, according to Wintermute. Despite the Federal Reserve's hawkish decision and a sharp rise in 30-year US Treasury yields, major cryptocurrencies fell less than 4%. Bitcoin dropped 2.84% last week, while Ether fell 3.63%. The firm notes that it is still too early to expect a strong rebound, citing low open interest in major cryptocurrencies.
Wintermute also highlighted the recent net outflows from US spot Bitcoin exchange-traded funds (ETFs), which totaled $265 million on the final trading day of last month. In contrast, spot Ether ETFs posted $27 million of inflows for a fourth straight week. This shift in institutional interest may be pointing to a move away from Bitcoin towards Ether.
However, Wintermute warns that the current view of exhausted selling would be invalidated if last week's lows are breached on heavier trading volume. The firm emphasizes that it is premature to call the start of a full-fledged bull market, as most market participants are not positioned for a strong rebound.