Wintermute: If bitcoin falls below $75,000, it may quickly test the $70,000 range

BlockBeats News, May 19 — Wintermute released a market opinion stating that, with U.S. inflation heating up again and interest rate expectations reversing, the crypto market has come under significant pressure this week. Bitcoin failed to break through the 200-day moving average at the first encounter with major macro shocks, indicating that the previous rally was driven more by short covering rather than continuous inflows of new funds. The market environment has clearly changed, with U.S. CPI growth accelerating, core inflation exceeding expectations, real wages turning negative, and the yield on 10-year U.S. Treasuries rising to 4.58%. At the same time, a newly appointed, more hawkish Federal Reserve Chair will take office in three weeks.

The pricing of the Federal Reserve's policy path has also changed rapidly, shifting from betting on rate cuts to concerns about another rate hike within just five trading sessions. Cross-asset performance reflects this change as well: Brent crude oil rose 8.6% this week, while Bitcoin and Ethereum fell by 5.7% and 10.2% respectively. Capital is flowing into inflation-driving assets, while cryptocurrencies have performed even weaker than the stock market during the decline. This relative weakness is regarded as a warning sign.

Although long-term structural positives remain—including Bitcoin reserves on exchanges holding at multi-year lows, long-term holders continuously accumulating, and progress on the U.S. crypto regulatory bill "CLARITY"—institutional funds in the short term are more inclined to take profits on rebounds rather than continue increasing positions. The market is currently focused on the $76,000 to $78,000 range for Bitcoin. If this level holds after Nvidia reports earnings on Wednesday, market confidence may recover; but if Bitcoin falls below $75,000, with funding rates dropping and continuous ETF outflows, it could quickly test the $70,000 range.