- At Wintermute, they believe the crypto market is showing signs that the bearish phase is coming to an end.
- In their view, leading crypto assets weathered last week’s harsh macroeconomic events relatively well.
- At the same time, the experts do not expect a rapid start to a new uptrend, but they allow for a short-term rise amid low summer liquidity.
The cryptocurrency market is showing signs that the bear cycle is nearing its end, despite harsh macroeconomic conditions and ongoing uncertainty around US monetary policy. Wintermute analysts came to this conclusion in their weekly market review.
In their view, the key feature of the past week was the relative resilience of digital assets against a backdrop of events that traditionally put strong pressure on risk assets.
Crypto market held up better under pressure than analysts expected
The experts noted that last week the market faced several negative factors at once: the US Federal Reserve kept interest rates unchanged, yields on 30-year US Treasuries hit their highest level in nearly two decades, and a major artificial intelligence-focused fund was forced to liquidate a significant portion of its assets.
Despite this, bitcoin and Ethereum lost less than 4% over the week. At Wintermute, they believe this performance points to a gradual exhaustion of selling pressure.
“The fact that the crypto market weathered such shocks relatively well indicates that additional selling pressure has been almost fully exhausted,” the review says.
According to the experts, excessive optimism is now leaving the stock market first and foremost, while cryptocurrencies are showing greater resilience.
Upside potential remains, but risks persist
At the same time, the authors of the review do not expect the market to quickly shift into a sustained uptrend. They say open interest in leading cryptocurrencies remains muted, although it is gradually rising in some tokens. This, combined with low summer liquidity, could create conditions for a short-term technical bounce.
At the same time, this scenario would be invalidated if the market revisits last week’s lows on rising trading volumes, which would signal the return of active sellers, Wintermute noted.
Analysts paid particular attention to the structure of institutional demand. In late July, spot Bitcoin ETFs in the United States recorded net outflows, while Ethereum funds posted a fourth consecutive week of net inflows. In addition, Strategy once again sold part of its bitcoin holdings to fund dividend payments, which, according to experts, turns one of the largest bitcoin buyers into a periodic seller during periods of weakening demand.
Macro data and Fed signals take center stage
Analysts cited the release of the ISM Services index and the U.S. labor market report as the nearest catalysts for the market, as they could influence expectations about the Federal Reserve’s next steps.
Another key event in August will be the symposium in Jackson Hole, where Fed Chair Kevin Warsh may provide fresh signals on the future path of monetary policy ahead of the regulator’s September meeting. Experts believe these factors will determine the crypto market’s next direction.
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