According to Wintermute's latest weekly market update, the recent crypto market rally may be losing momentum as macroeconomic pressures return. The trading firm warned that Bitcoin's breakout was driven more by leverage and short covering rather than genuine spot demand, with the recent selloff confirming this assessment. Bitcoin fell 5.7% during the week after briefly moving above $82,000 following progress around the CLARITY Act, while Ethereum dropped more than 10%. The selloff intensified over the weekend with nearly $657 million in crypto liquidations, most of them long positions.
As reported by Wintermute, the reversal was largely triggered by a sharp macroeconomic repricing following hotter-than-expected U.S. inflation data. April CPI came in above expectations while the U.S. 10-year Treasury yield climbed to 4.58%, its highest level since September 2025. 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. Additional factors complicating the market outlook include rising oil prices, negative real wage growth, and the confirmation of Kevin Warsh as Fed Chair.
According to Wintermute's analysis, renewed weakness in crypto investment products highlighted institutional caution during the rally. Spot Bitcoin ETFs recorded roughly $1 billion in outflows during the week, ending a six-week inflow streak, while Ethereum ETFs lost another $255 million. Citing Glassnode data, the firm said institutions appeared to be "selling into strength" rather than adding exposure during the rally. However, some areas of the digital asset market continued showing resilience, including XRP and Solana ETF-related products, long-term Bitcoin holder accumulation, and continued growth in tokenized Treasury products, which reportedly reached $15 billion onchain.
As reported by Wintermute, Bitcoin now faces a key support zone around $76,000 to $78,000, warning that a break below $75,000 could open the door to a move toward the low-$70,000 range. The firm argued that crypto's recent underperformance relative to equities may signal that digital assets are once again becoming increasingly sensitive to changing macro conditions. Despite short-term pressure, the report suggested the longer-term structural case for crypto remains intact.
