Wintermute: Bitcoin Loses Inflow Support, Short-Term Caution Advised for Altcoins

Wintermute said in a post that the Federal Reserve’s meeting minutes show most officials expect another interest rate hike this year, with markets pricing in roughly a 20% probability of a hike at the end of October, while the U.S. 10-year Treasury yield rose to 5.24%. Against this backdrop, the S&P 500 rose 1.2% last week to hit a new all-time high, while the crypto market underperformed. The stock market’s gain was supported by expectations of corporate earnings growth, whereas the crypto market lacks such earnings support and relies more on new capital inflows; as capital flows reversed, crypto assets’ six-week streak of counter-trend gains became unsustainable. Bitcoin retreated from the $86,000–$87,000 range last week, hitting a low of around $80,400 on Thursday before rebounding above $83,000 and reclaiming the $82,500 range high. U.S. spot Bitcoin ETFs saw a net outflow of roughly $679 million last week, marking their largest weekly outflow since late June, while Ethereum ETFs had a net outflow of about $542 million. The crypto market has lost capital inflow support, while U.S. equities remain underpinned by earnings growth. Thus, in the short term, the market will only remain bullish if long-term Treasury yields stabilize and spot ETFs see net inflows again. Until these two conditions are met, Bitcoin remains an asset more sensitive to U.S. stock market volatility with elevated downside risk, and chasing low-quality altcoins is not recommended. If the U.S. 30-year Treasury yield breaks above the 5.64% level hit on September 30, or Bitcoin continues to face resistance near $82,500, Wintermute will turn cautious. This week, focus will be on the U.S. September CPI data, due Wednesday, to assess whether energy inflation is spreading to core inflation, as well as earnings results from financial institutions and AI-related companies.