Wintermute "Bitcoin, holding $80,000 is not the end"...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 it 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 bullishness in the spot market.

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

Funding remains largely on the short side, indicating the possibility of further short squeezes. However, Wintermute warned that if spot buying fails to support higher price levels 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 inflows, 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 7-year low was also cited as evidence that the accumulation trend is still alive.

Wintermute diagnosed that the current bullish logic relies more on institutional capital and supply-side support than on broad, natural spot participation. It also analyzed that while a further rise towards $85,000 is possible given Bitcoin's Relative Strength Index (RSI) entering an overbought zone, the risk-reward for late chase buying at current levels is not attractive.

The report also presented macro variables as short-term risks. It suggested that the stock market is currently leading cryptocurrency trends, and a stock-led tailwind could stop if the Consumer Price Index (CPI) comes in high or if a wash conversion creates uncertainty. Wintermute assessed that even amidst such shocks, Bitcoin needs to hold above $80,000 to more clearly confirm that this movement extends beyond a leverage-based short squeeze.

Bitcoin was consolidating just above $80,800 at the time of reporting. 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 can only achieve sustainability if it is confirmed by spot demand above the $80,000 support level.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*