Wintermute warns Bitcoin relief rally at risk as $64K resistance holds

A major crypto market maker cautioned that Bitcoin's push to a multi-week high lacks the fundamental demand needed to sustain it.

Bitcoin hit $63,960 on July 7, a two-week high, as short covering fueled a bounce from $60,000. Wintermute called it a relief rally lacking fundamental demand.

"The current price action appears to be driven by short covering and a pause in selling pressure rather than genuine new demand," Wintermute said in a note. "Sustained growth requires stronger crypto-specific demand and institutional engagement, which remain absent."

Total crypto short liquidations reached just over $100 million in the 24 hours to the weekly close, per CoinGlass data, as Bitcoin reclaimed the $63,000 level for the first time since late June. Whale inflows to Binance have cooled sharply since mid-June, with the rolling 30-day value falling by nearly $2.4 billion, according to CryptoQuant. Retail inflows declined at a shallower pace, from $10.02 billion on June 12 to $8.2 billion on July 6.

The $64,000 level now acts as the immediate resistance — a ceiling that capped multiple bounces throughout June. A decisive break above that threshold would open the door to a test of the 100-day moving average near $69,500, according to market analysis. Failure to hold current levels risks a retest of the $60,400-to-$60,900 support zone, which one trader called Bitcoin's "most important" area. A break below that range could send price trending back toward the lows near $58,000, aligned with Citi's recession scenario.

Cooling Flows, But No New Demand

The decline in exchange inflows suggests both retail and whale investors have stopped selling at the pace seen in June. Whale activity on Binance fell at nearly twice the rate of retail inflows, reducing the relative role of large holders in exchange-bound Bitcoin supply, CryptoQuant data shows. The gap between retail and whale inflows widened from about $2.98 billion to $3.55 billion over the same period.

Yet the absence of selling is not the same as new buying. The Crypto Fear & Greed Index remains in "extreme fear" territory at 24 out of 100, more than double its score at the start of July but still deep in bearish sentiment. ETF inflows, a key demand driver earlier in the year, have not returned with enough force to absorb available supply at current levels.

What Comes Next

The near-term path depends on whether Bitcoin can convert this relief bounce into a structural recovery. The CLARITY Act, which would shift crypto oversight to the CFTC and unlock institutional demand, remains stalled in Congress. If the bill passes after the August recess, it could provide the regulatory catalyst Wintermute says is missing. If it stalls, the asymmetric risk-reward that bulls have counted on may take longer to materialize.

Citi's base case for Bitcoin sits at $143,000, with a bull case at $189,000 and a recession scenario at $58,000. For now, the market is trading closer to the bearish end of that range, waiting for a catalyst that has yet to arrive.

This article is for informational purposes only and does not constitute investment advice.