Bitcoin and ether are experiencing a downward trend, as noted by major market-making firm Wintermute’s over-the-counter (OTC) trading desk. In its analysis shared with CoinDesk, the firm highlighted that the two cryptocurrencies are currently positioned at the lower boundaries of their recent trading ranges. This situation arises against the backdrop of a hawkish stance from the Federal Reserve and fluctuating news regarding Iran.
In terms of market movements, options markets are indicating limited volatility in the next day. Wintermute’s analysis of one-day straddles suggests that bitcoin is expected to fluctuate within the range of $61,242 to $63,563, while ether is anticipated to stay between $1,606 and $1,694. This translates to potential price movements of approximately 1.9% for bitcoin and 2.7% for ether.
The overall market conditions appear to be deteriorating, with an increase in token correlations indicating that these assets are moving in sync rather than based on their individual fundamentals. Additionally, liquidity is thinning as the market enters the summer months, with a noticeable absence of new institutional investment, particularly in exchange-traded funds (ETFs).
Wintermute has pinpointed the $59,000 level as critical to watch, identifying it as the bear market low and the main support level that could be tested if the current bearish pressure persists.
Looking ahead, three key catalysts are expected to influence market dynamics over the coming week. These include the ongoing U.S.-Iran peace negotiations and their potential stability, the forthcoming PCE inflation print—an important gauge of price growth favored by the Federal Reserve—and the quarterly expiry of options at the end of the month, which could significantly amplify market movements due to traders adjusting their positions.
