The cryptocurrency market is showing signs of a bear cycle ending, despite tough macroeconomic conditions and persistent uncertainty regarding US monetary policy. This conclusion was reached by Wintermute analysts in their weekly market review.
In their opinion, the main feature of the past week was the relative resilience of digital assets amid events that traditionally put strong pressure on risk-on instruments.
The Crypto Market Withstood Pressure Better Than Analysts Expected
The experts noted that last week the market simultaneously faced a number of negative factors: the US Federal Reserve kept interest rates unchanged, the yield on 30-year US bonds reached a nearly two-decade high, and a large fund from the artificial intelligence sector was forced to liquidate a significant portion of its assets.
Despite this, Bitcoin and Ethereum lost less than 4% for the week. Wintermute believes that such dynamics indicate a gradual exhaustion of seller pressure.
"The fact that the crypto market weathered such shocks relatively well points to an almost complete exhaustion of additional seller pressure," the review states.
According to the experts, excessive optimism is now primarily leaving the stock market, while cryptocurrencies are showing greater resilience.
Potential for Growth Remains, But Risks Persist
At the same time, the authors of the review do not expect a quick transition of the market to a sustained uptrend. According to them, open interest in leading cryptocurrencies remains subdued, although it is gradually growing in individual tokens. This, together with low summer liquidity, could create conditions for short-term technical growth.
However, this scenario would be invalidated if the market retests last week's lows on rising trading volumes, which would signify the return of active sellers, Wintermute noted.
The analysts paid special attention to the structure of institutional demand. At the end of July, spot Bitcoin ETFs in the US recorded an outflow of funds, while Ethereum funds finished their fourth consecutive week with net inflows. Furthermore, Strategy company again sold part of its Bitcoins to fund dividend payments, which, according to experts, turns one of the largest Bitcoin buyers into an occasional seller during periods of weakened demand.
The Focus is on Macro Statistics and Fed Signals
The analysts named the upcoming publication of the ISM Services Index and the US jobs report as the nearest catalysts for the market, which could influence expectations regarding the Federal Reserve's further actions.
Another important event in August will be the Jackson Hole Symposium, where Fed Chair Kevin Warsh could give new signals regarding future monetary policy ahead of the regulator's September meeting. According to the experts, these factors will determine the further direction of the cryptocurrency market's movement.
