Wintermute: Despite a brief rebound on Monday, the market remains fragile. Caution is advised.
BlockBeats News, March 3 — Wintermute released a market outlook stating that Iran’s geopolitical conflict has caused significant volatility in risk assets. For cryptocurrencies, the weekend decline absorbed the first wave of geopolitical panic, and the rebound was driven by the market believing Bitcoin has fallen 45% from its all-time high, with most losses already priced in. However, the impact of energy factors has been underestimated. Persistently high oil prices could keep inflation elevated, and central banks around the world initially hoped to cool inflation, which could further delay rate cuts in the U.S. Cryptocurrency is at a disadvantage in this game.
Although ETF inflows have recently resumed, current trading activity shows that institutional participation is significantly lower than the $85,000 to $95,000 trading range seen from November last year to September this year. Back then, institutional trading was more active, especially during price declines. Now, at current levels, buying interest is clearly lacking. The market appears very fragile.
Finally, altcoins continue to follow typical bear market patterns, as positive returns are very short-lived and investors lack the willingness to chase excess gains, making sustained upward trends unlikely for most altcoins.
Wintermute believes that although cryptocurrencies experienced a brief rebound on Monday, the market remains fragile with volatility rising again. As the risk premium for growth continues to climb and the Federal Reserve remains unable to intervene, cryptocurrencies—being high-beta growth assets—are under ongoing pressure. ETF outflows (though temporarily halted now) confirm this. This is the current reality.
Wintermute advises investors to exercise caution at this time. The market’s focus remains mainly on conflict news, especially any progress toward reopening the Strait of Hormuz or easing hostilities. If the conflict lasts longer than expected, rising energy costs could reshape interest rate expectations and put broad pressure on risk assets.
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