Wintermute "Bitcoin, It's Not Over After Holding $80,000"...Caution Against Bullish Optimism

▲ Bitcoin (BTC) / AI Generated Image

After Bitcoin (BTC) rose to $83,000 last week, the market is being tested on whether it can maintain the $80,000 support level. Bitcoinist reported on the 13th that market maker Wintermute warned in its latest digital asset report about this upward trend, stating, “The way we got here suggests caution rather than excitement.”

Wintermute assessed that this rally cannot be considered a healthy spot market breakout. The report pointed out that while open interest increased by approximately $10 billion during Bitcoin's ascent, spot trading volume fell to its lowest level in two years. Wintermute explained that this combination is contrary to the conditions typically observed when confirming sustained bullish momentum in the spot market.

Wintermute believes that bull markets are usually confirmed by spot demand rather than derivatives pressure. This rally primarily stemmed from perpetual futures activity, and the report evaluated this structure as a riskier mechanism. Wintermute emphasized that buying pressure resulting from short position liquidations or covering is not the same as conviction-based buying.

Funding remains largely on the short side, leaving open the possibility of further short squeezes. However, Wintermute warned that if spot buying pressure fails to support higher prices after a short squeeze weakens, the market could give back its gains. While the long-term outlook may appear relatively stable, the short-term upward momentum is questionable.

However, Wintermute also presented favorable long-term factors. The report explained that $623 million was added to Bitcoin spot ETF fund flows, and Morgan Stanley's new Bitcoin ETF attracted $194 million in its first month without experiencing a single day of outflows. The fact that exchange reserves remained at a seven-year low was also cited as evidence that the accumulation trend is still alive.

Wintermute diagnosed that the current bullish narrative relies more on institutional capital and supply-side support than on broad and organic spot participation. Furthermore, as Bitcoin's Relative Strength Index (RSI) has entered the overbought zone, further upward movement towards $85,000 is possible, but the risk-reward for late chase-buying at current levels is unattractive, the analysis concluded.

The report also presented macro variables as short-term risks. It suggested that the stock market is currently driving cryptocurrency trends, and a high Consumer Price Index (CPI) or uncertainty from a "wash" transition could halt the stock-led tailwind. Wintermute assessed that even amidst such shocks, Bitcoin must hold above $80,000 to more clearly confirm that this move goes beyond a leverage-driven short squeeze.

At the time of reporting, Bitcoin was consolidating just above $80,800. Bitcoinist, citing CoinGecko data, reported that Bitcoin has maintained a 14% gain over the past month, even after pulling back from $83,000. Wintermute's warning is focused on the idea that Bitcoin's upward trend needs to be confirmed by spot demand above the $80,000 support level to ensure sustainability.

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