Amid a broad market selloff, Wintermute has issued a stark warning that the crypto bear market persists, with signs of capitulation but no confirmed bottom. Simultaneously, on-chain data reveals a rare pattern that historically appears only near major market lows, creating conflicting signals for traders.
Wintermute’s Caution
In a report, the market maker described current conditions as a late-stage bear phase. Bitcoin dropped 5.9% during the week, briefly slipping below $60,000 and touching its 200-week moving average—a level closely watched by long-term traders. Ethereum fared worse, shedding 7.9% as risk appetite weakened, underperforming Bitcoin and adding pressure on altcoins.
Wintermute attributed the selloff to external pressures including Nasdaq weakness, a stronger dollar, fading momentum in AI trades, and expectations of higher-for-longer interest rates. The firm emphasized that capitulation alone does not guarantee a durable bottom and highlighted weak flows as a reason for caution. ETF outflows remain a key concern, as reduced exposure from these funds can erode spot demand. Additionally, Strategy’s new Bitcoin monetization framework suggests treasury buying may become more conditional, potentially removing a steady source of BTC demand. Until ETF flows and treasury activity improve, the bear market signal stays active, Wintermute noted.
Whales Dump, but Rare Bottom Signal Emerges
Separately, Santiment reported that wallets holding between 10 and 10,000 BTC reduced their combined holdings by 0.37% since June 15, indicating continued selling by whales and sharks as Bitcoin hit a 21-month low of $58,100. Conversely, retail wallets with less than 0.01 BTC accumulated 0.51% more over the same period, treating the dip as a buying opportunity. This divergence suggests large stakeholders remain on the sidelines while smaller investors show conviction.
Despite this, analyst Ali Martinez highlighted an even rarer on-chain phase: Bitcoin’s supply in loss has exceeded its supply in profit for the first time in this cycle—around 10.45 million BTC are underwater versus 9.60 million in profit. Martinez noted that similar crossovers occurred only a handful of times in the past 15 years: September 2011 (bottom by November), September 2014 (lasted until October 2015), November 2018 (bull market began March 2019), and March 2020 (recovery after 17 days). The current crossover, which emerged in June 2026 and remains active, places Bitcoin in what he describes as a high-conviction accumulation zone.
Macro Catalysts Still Needed
Beyond on-chain data, Bitget’s Chief Analyst Ryan Lee stressed that the market requires stronger catalysts to truly reverse—such as better macro data, a rebound in Bitcoin ETF inflows, cooling geopolitical risks, or renewed institutional positioning. “Crypto remains highly sensitive to any shift in the rate outlook because Bitcoin, Ethereum, and altcoins are still trading as liquidity-sensitive risk assets,” Lee said, adding that sticky inflation could limit the Fed’s ability to cut rates, tightening liquidity and pressuring prices.
