Wintermute: BTC Shows Clear Lack of Buying Interest at Current Price Levels, Market Remains Highly Fragile

Odaily News Wintermute published an article stating that this week's cryptocurrency decline was driven more by macro factors rather than factors specific to any particular coin. The weekend drop digested the first wave of geopolitical panic, while the rebound stemmed from the market's perception that Bitcoin had fallen 45% from its all-time high, with most negative news already priced in. However, the impact of energy factors has been underestimated. Persistently high oil prices could keep inflation elevated, contrary to central banks' hopes for cooling inflation, which might further delay U.S. interest rate cuts. Cryptocurrencies are at a disadvantage in this scenario.

Late last week, ETF flows reversed, with net inflows exceeding $1 billion, ending a previous five-week streak of outflows. Although year-to-date outflows still amount to approximately $4.5 billion, long-term holders appear to be holding relatively little, with most of the recent selling related to speculative positions rather than institutional investor exits.

Based on current trading conditions, institutional participation is significantly lower than during the trading range of $85,000 to $95,000 from last November to this September. At that time, institutional trading was more active, especially during price declines. Currently, at these price levels, buying interest is clearly insufficient. The market appears highly fragile.