Bitcoin Rebound Too Early to Call a Bottom as ETF, Stablecoin Flows Stay Weak

Crypto market maker Wintermute said it is too early to declare that Bitcoin has regained its trend despite the token’s recent rebound. A U.S. inflation report that met expectations and hopes for a U.S.-Iran ceasefire helped lift risk assets, but structural flows in the crypto market have yet to recover.

Wintermute wrote on X on June 16 that this week’s relief rally was the result of two factors moving in the same direction. May U.S. consumer prices matched market forecasts, while an end to the U.S.-Iran conflict pushed oil, the dollar and bond yields lower.

The firm said the key takeaway from the May CPI report was that headline inflation rose 4.2% from a year earlier, accelerating for a third straight month, yet still came in line with expectations. Core CPI slowed to 2.9%, which Wintermute said suggests the energy-price shock may be nearing its peak rather than spreading into services and wages.

A U.S.-Iran agreement also supported risk assets. Wintermute said the conflict involving Iran, which had lasted more than 100 days, had ended and that President Donald Trump declared on Sunday that the agreement was complete. The reopening of the Strait of Hormuz and the lifting of the maritime blockade have been approved, with a formal signing set for June 19 in Switzerland.

Falling oil prices are also easing inflation pressure. Brent crude has dropped from the low $110s a month ago to the high $80s, including a 6.6% decline this week alone, according to Wintermute. The geopolitical risk premium that had driven markets since late February is being unwound quickly.

Wintermute said the Federal Reserve’s task has become more complicated. Headline inflation at 4.2% supports the case for higher rates for longer, while softer core inflation and a sharp drop in oil prices suggest the inflation shock may prove temporary. It said no rate change is anticipated at Wednesday’s Federal Open Market Committee meeting and highlighted the dot plot, economic projections and Fed Chair Kevin Warsh’s first press conference as the key events.

Wintermute did not view the latest move in crypto as a structural shift. “This week was a rebound,” it wrote, noting that Bitcoin recovered from the low $60,000s to post a 1.9% weekly gain, while altcoins rose 3.1%. Ether lagged, falling 0.4% on the week.

“Nothing has structurally changed here,” Wintermute said. “Crypto is a high-beta risk asset responding to an improved market backdrop.”

The firm described Bitcoin’s recent decline as another fade following a bear-market rally. Bitcoin has gone through three corrections of more than 20% since October last year, it said. The latest slide, from $83,000 to $60,000, confirmed that the move was not the start of a renewed bull market but a false rebound within a bear market.

Wintermute said the next move will hinge not on price but on capital flows. “What matters is not price or headlines, but flows,” it said. In the previous cycle, sustained turnarounds in ETF and stablecoin inflows signaled the market’s real rallies, and there are still no signs of that happening now.

Wintermute identified stablecoins, exchange-traded funds and digital asset treasuries, or DATs, as the main channels for crypto liquidity. But assets in DATs have fallen to about $140 billion from roughly $220 billion, and new fundraising has effectively stalled outside Strategy, BitMine and Strive. ETFs have also logged their longest stretch of net outflows since launch, while stablecoin flows remain weak.

Wintermute said risk-reward near local lows remains attractive over the long term, but that does not mean a bottom has been confirmed. It added that a move back into the $50,000 range cannot be ruled out before conditions improve.

As for near-term catalysts, Wintermute pointed to the FOMC meeting and the formal U.S.-Iran signing ceremony. If Chair Warsh interprets softer core inflation and lower oil prices in a dovish way, the relief rally could extend. If he places greater weight on 4.2% headline inflation, the rebound may end.

The market has taken Bitcoin’s defense of the $60,000 level as an encouraging sign. Still, until structural inflows from ETFs, stablecoins and corporate buying recover, investors may need to brace for volatility rather than bet too aggressively on a short-term rebound.