Wintermute warned that Bitcoin’s recent rally may have been driven more by leverage than genuine spot demand as macro fears return.
A recent crypto market rally driven by leverage and short covering may be losing momentum as inflation concerns, rising Treasury yields, and renewed macro uncertainty begin pressuring digital assets again, according to trading firm Wintermute.
In its latest weekly market update, Wintermute argued that the recent Bitcoin breakout lacked strong spot demand and was instead largely fueled by derivatives positioning and short squeezes.
“Last week we flagged the breakout was leverage and short covering, not spot,” the firm wrote. “This week confirmed it.
”following progress around the CLARITY Act, while$657 million in crypto liquidationsWintermute linked the reversal largely to a sharp macroeconomic repricing triggered by hotter-than-expected U.S. inflation data.10-year Treasury yield climbed to 4.58%The firm noted that futures markets have rapidly shifted from expecting Federal Reserve rate cuts toward pricing in the possibility of another rate hike later this year.as additional factors complicating the market outlook. Wintermute’s analysis also highlighted renewed weakness in crypto investment products.during the week, ending a six-week inflow streak, whileCiting Glassnode data, the firm said institutions appeared to be “selling into strength” rather than adding exposure during the rally.
At the same time, Wintermute noted that some areas of the digital asset market continued showing resilience, including:and continued growth in tokenized Treasury products, which reportedly reachedWintermute argued that crypto’s recent underperformance relative to equities may signal that digital assets are once again becoming increasingly sensitive to changing macro conditions. , warning that a break belowStill, the report suggested the longer-term structural case for crypto remains intact despite short-term pressure.
Wintermute said Bitcoin’s recent rally was largely driven by leverage and short-covering rather than by strong spot demand. Rising inflation, higher Treasury yields, and ETF outflows are now pressuring crypto markets again, according to the firm.
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