Wintermute: Crypto Market Enters Late Bear Market, But True Bottom May Not Have Arrived Yet

BlockBeats News, June 30th, Wintermute released its latest market report stating that Bitcoin has fallen below $60,000, Ethereum has weakened in sync, and the crypto market has entered the late stage of a bear market, but the true bottom of the cycle may not have appeared yet.

The report pointed out that recent AI trading cooling has become the global market trend, with the Nasdaq falling for five consecutive trading days, the Philadelphia Semiconductor Index plummeting 7% in a single day, funds starting to rotate from large-cap tech stocks to small-cap stocks and US Treasury bonds, and crypto assets facing pressure in sync with tech stocks. At the same time, US May PCE inflation rose to 4.1%, strengthening the market's expectation for the Fed to maintain high interest rates in the long term, and the strengthening US dollar further suppressed the performance of risk assets.

Wintermute believes that the current market sentiment has entered the extreme fear zone, with the Fear and Greed Index remaining at 18 to 24, about half of Bitcoin's circulating supply is now at an unrealized loss, both nearing historical bear market bottom characteristics. However, the report pointed out that what is currently lacking is the re-entry of funds, with recent net outflows of about $1.8 billion from spot ETFs, and stablecoins and other liquidity indicators have not shown improvement.

Regarding Wintermute's latest capital framework, the report stated that the company has increased the STRC dividend, initiated a stock buyback, and formally authorized the sale of up to approximately $1.25 billion in Bitcoin for the first time, helping to reduce the capital structure risk, thus receiving a positive market response. However, the report believes that Bitcoin reserves companies are starting to retain the right to sell BTC to pay dividends, also indicating that the market's long-standing "permanent buy-side" is gradually transitioning to a "conditional buy-side."

Wintermute expects that due to historical seasonal effects, the crypto market is highly unlikely to bottom out in the summer, but is more likely to see a true bottom around September to October, and the subsequent trend will still depend on the macro environment, the cooling of the AI sector, and the return of funds to the crypto market.