Wintermute Says Crypto Rebound Is Relief Rally, Bull Market Call Is Premature

Wintermute, a crypto market maker, said it is too early to treat the recent rebound in digital assets as the start of a full-fledged bull market.

In a post on X on July 7, the firm said risk assets rebounded as signs of a slowdown in the US economy, expectations for looser Federal Reserve policy and easing tensions in the Middle East converged. Even so, it said the move is more appropriately viewed as a relief rally than a structural bull market until capital flows across the broader market improve on a sustained basis.

Major US macroeconomic data released last week helped ease inflation concerns, supporting gains across most risk assets. Ethereum rose 13.54% from a week earlier, while Bitcoin gained 6.75%.

Wintermute said Bitcoin's rise appears relatively resilient. In its report, the firm wrote that whale investors accumulated more than 270,000 Bitcoin near the 200-week moving average, while options-market demand shifted from downside protection to purchases of $60,000 to $70,000 call options.

Still, Wintermute said spot exchange-traded fund flows warrant close attention. The report said spot Bitcoin ETFs recorded net inflows of $221.7 million on July 2, ending a streak of net outflows over the previous 10 trading days. But a single day of inflows is not enough to confirm a trend reversal, it added. Cumulative net outflows for the year still stand at about $5.4 billion.