Wintermute: No Signs of Capital Return, Bottom Not Yet Reached

Trading platform Wintermute states that there are still no clear signals that capital is returning to the crypto market. According to the company, the recent decline in the Bitcoin price is mainly due to selling by US institutional parties and outflows from ETFs, and not so much to the sale of 32 Bitcoin by Strategy. The Bitcoin price currently stands at $61K, a drop of 2.9% in the past 24 hours.

Wintermute indicates that it is too early to speak of a market bottom, although some long-term investors are starting to build positions at current levels.

Bitcoin is available at OKX and Bybit.

Institutional sales and ETF outflows weigh on the price

According to Wintermute, the recent price pressure is caused by US institutional investors reducing their Bitcoin positions, combined with significant outflows from ETFs. The sale of just 32 Bitcoin by Strategy plays hardly any role in this. JPMorgan previously warned of potential Bitcoin sales by Strategy, although the actual impact remains limited.

That the pressure on the market is felt more broadly is also evident from the behaviour of short-term holders. For instance, Bitcoin holders are sending BTC to exchanges at a loss, indicating increased selling pressure from that group. At the same time, Wintermute’s cross-asset performance table for week 23 shows that Bitcoin, with a loss of 14.1%, is the second-worst performing asset class, just above Ethereum, which lost 15.9%.

Bottom not yet confirmed, but accumulation begins

Wintermute is cautious about a possible bottom formation. Capital inflows have not yet returned and, according to the company, market conditions do not provide sufficient grounds to confirm a bottom. The data as a whole point to a market still searching for stability.

Nevertheless, there are cautious signs of recovery interest. Some long-term investors are starting to accumulate at current levels, which could be a first step towards stabilisation. Notably, Strategy continued to buy despite the turmoil and recently purchased 1,550 Bitcoin and further expanded its reserves. The question is whether such purchases will generate enough confidence in the long term to attract new capital to the Bitcoin market.