Wintermute: Bitcoin's rally is more in line with a "relief rally" pattern rather than the start of a new bull market

BlockBeats News, July 7th. Wintermute released a market analysis stating that the latest US non-farm payroll data was well below market expectations. Coupled with Powell's remarks being interpreted as dovish by the market, this has driven a broad-based rebound in global risk assets, with the crypto market outperforming particularly well. Both Bitcoin and Ethereum have significantly outperformed the S&P 500 and Nasdaq indices recently. The foundation of Bitcoin's current rally is more solid, mainly driven by continued accumulation by whales, bullish options flow, and improving on-chain data. The shift from net outflows to net inflows in Bitcoin spot ETFs has also provided some uplift to market sentiment.

The cooling of the US job market has further dampened expectations of a rate hike this year, and Powell's reaffirmation of the 2% inflation target at the Sintra Forum without signaling a more hawkish stance has been interpreted by investors as the Fed's policy leaning towards a more dovish approach. In the crypto market, Bitcoin on-chain data shows that whale wallets have accumulated over 270,000 BTC near the 200-week moving average, while the options market funds have shifted from hedge positions to bullish options with strike prices between $60,000 and $70,000. Meanwhile, Ethereum's rise has been largely narrative-driven by institutions, including the formal launch of Ethereum Institutional and the continued development of institutional tokenization infrastructure. However, recent actions by the Ethereum Foundation, such as a 20% workforce reduction and a budget cut of around 40%, along with previous outflows from ETH ETFs, still indicate some underlying pressure.

This rally more aligns with the characteristics of a "relief rebound" rather than the start of a new long-term bull market. The improvement in the macro environment, easing of the Middle East situation, ongoing institutional positioning in Ethereum, and the low summer liquidity have all contributed to the market recovery. However, from a funding perspective, Bitcoin spot ETFs have seen cumulative outflows of around $2.73 billion so far this year. Until there is a sustained improvement in ETF fund flows forming a trend, the market should still consider the current market movement as a sentiment recovery rather than a structural reversal and maintain a cautious outlook for the future.