Wintermute said crypto’s marginal selling pressure is approaching exhaustion, but the firm still does not think this is the time to take heavy positions in anticipation of a strong rebound.
In a note published on Aug. 4, Wintermute said the Federal Reserve left the federal funds rate unchanged last week, allowing U.S. stocks to stabilize. Part of that stability, it said, came after large forced sellers had already been cleared from the market.
The firm pointed to the leveraged AI fund Situational Awareness, which sold its disclosed positions to Citadel at a discount. After AI infrastructure longs were hit hard and software shorts were squeezed, selling in chip stocks briefly became self-reinforcing. Once those positions changed hands, Wintermute said, the market was able to absorb a hawkish hold from the Fed.
Crypto, in Wintermute’s view, has been relatively resilient. It cited Strategy selling Bitcoin again to pay preferred-share dividends, a Coldcard firmware vulnerability that led to the theft of users’ large Bitcoin holdings, and continued clearing in altcoins. The sequence also matched its earlier view that pressure would first be released in U.S. equities and then in crypto.
Wintermute said major tokens retraced less than 4% despite those multiple shocks, which suggests marginal selling pressure is close to being exhausted. Still, the firm warned that it is not yet appropriate to build oversized positions for a strong rebound. At the same time, positioning and options data show some market participants could be caught off guard by a short-term technical rally.
For this week, Wintermute said markets should watch the ISM services report and nonfarm payrolls. It also said the Jackson Hole meeting will be Walsh’s last clear signaling window before the September rate decision.
Wintermute added that institutional OTC spot activity has risen to a record 72% share, with liquidity continuing to concentrate in major assets.