Wintermute Says Bitcoin Is in Late-Stage Bear Market, But Bottom Isn’t In Yet

The cryptocurrency market has come under pressure alongside a pullback in artificial-intelligence stocks and renewed concern that interest rates will stay higher for longer. In that backdrop, Wintermute said Bitcoin appears to be in the later stages of a bear market, though a bottom has not yet been confirmed.

On June 30, crypto market maker Wintermute wrote on X, formerly Twitter, that “the bear market is well advanced, but it is hard to say a true bottom is in.”

Bitcoin fell 5.9% on June 29, dropping below $60,000 and at one point sliding to about $59,300, according to Wintermute. Ether declined 7.9% and traded near $1,580. Bitcoin is now hovering around its 200-week moving average.

The correction coincided with weakness in AI-related stocks. The Nasdaq fell 4.5%, extending its losing streak to five straight sessions. Semiconductor shares also dropped sharply. Wintermute characterized the move not as a broad-based flight from risk, but as a rotation out of megacap technology and AI-linked stocks.

The macro backdrop added to the pressure. May personal consumption expenditures inflation rose 4.1%, the highest since 2023, reinforcing the view that interest rates may remain elevated for longer. The dollar index climbed to around 101, near a one-year high, weighing on risk assets including cryptocurrencies. Brent crude, by contrast, fell 8.1% on the week, leaving open the possibility that inflation pressures may ease.

Wintermute said market sentiment has already deteriorated sharply. The Fear & Greed Index remains in an extreme-fear range of 18 to 24, while the share of Bitcoin supply held at a loss is approaching 50%. In past cycles, similar conditions tended to emerge around market bottoms. But the share of loss-making supply often climbed to around 60%, suggesting there may still be room for further declines.

Liquidity indicators have yet to show a clear recovery. Wintermute said about $1.8 billion was pulled from Bitcoin ETFs last week, while over-the-counter trading flows also remained weak. It added that AI-related stocks are currently showing greater volatility than cryptocurrencies, meaning fresh capital could move into AI equities ahead of digital assets even if macro conditions improve.

Wintermute also pointed to risks surrounding Strategy. STRC fell to a record low near $72, while MSTR’s premium to Bitcoin narrowed to about 1 times, it said. That could weaken Strategy’s self-reinforcing cycle of buying more Bitcoin.

Strategy has tried to offset that risk by announcing a digital credit capital framework. The plan includes raising STRC’s dividend rate to 12%, setting up buyback programs of as much as $1 billion each for common and preferred shares, and securing $2.55 billion in dollar reserves. It also created a program allowing the company to sell as much as $1.25 billion of Bitcoin.

Wintermute said the market responded positively because the measures lowered the risk of a disorderly deterioration in Strategy’s capital structure. Still, it said the fact that a Bitcoin treasury company has left open the possibility of selling Bitcoin to fund dividends and buybacks underscores the strain in the current cycle.

Bitcoin has reached its 200-week moving average and investor sentiment has deteriorated sharply, but inflows into ETFs and a recovery in buying pressure have yet to be confirmed, Wintermute said. It added that a durable bottom is unlikely to form easily during the summer’s thin trading conditions, with additional pressure likely to persist through September or October before any recovery is determined by the macro backdrop.

Key variables to watch include the US jobs report, whether Bitcoin can hold its 200-week moving average and the $58,000 level, and trading in STRC. “For a bullish scenario to take hold, the AI trade needs to cool and the liquidity channel back into crypto needs to turn,” Wintermute wrote.