Wintermute experts: crypto market expects sideways movement until new liquidity emerges
The digital asset market received a short-term boost amid macroeconomic news from the US and a geopolitical shift between Washington and Tehran. My colleagues at Wintermute note that Bitcoin managed to hold above the $66,000 mark after a correction at the beginning of the month. This rebound was made possible by two key factors: the slowdown of the core Consumer Price Index (CPI) to 2.9% year-over-year and news of a preliminary agreement between the US and Iran, which involves opening the Strait of Hormuz and lifting the blockade on Iranian ports.
Overall US inflation stood at 4.2%, matching the market consensus forecast. However, it was the decline in the core indicator, which excludes volatile components, that signaled easing price pressure. Additionally, information about a planned meeting between the parties on June 19 in Switzerland triggered a drop in Brent crude oil prices to $80 per barrel and a decline in government bond yields, which traditionally supports risk assets.
Nevertheless, the dynamics within the crypto market remain uneven. Over the past week, Bitcoin gained 1.9%, while Ethereum showed weakness, losing 0.4%. The real problem, in my opinion, lies in the lack of fresh capital inflows. Outflows are being recorded in the segments of spot ETFs and stablecoins. Institutional investors are still focused on traditional stock markets, ignoring digital assets.
Wintermute analysts characterize the current recovery from the $60,000 levels as a "bear market rally." For a sustained upward trend toward $100,000, structural changes in liquidity are needed, which are not currently observed. The baseline forecast for the summer months is sideways movement or consolidation within a wide range.
The key catalyst for the upcoming week will be the US Federal Reserve meeting. The market is awaiting updated macroeconomic forecasts and the regulator's rhetoric. If the decline in oil prices allows the Fed to adopt a softer stance, the growth of risk assets may continue. Otherwise, a retest of levels below $60,000 cannot be ruled out. At Wintermute, they rightly advise focusing on ETF flows rather than news headlines.
My comment: Until we see a sustained inflow of funds into ETFs and stablecoins, any talk of a new bull run is premature. The market is in an accumulation phase, and summer consolidation is the most likely scenario. Investors should prepare for volatility, but without a clear trend.