Wintermute said Bitcoin\u2019s latest rally has failed its first major macro test, arguing that the move was driven more by leverage and short covering than by durable spot demand. In its May 18 market update, the trading firm pointed to hot inflation, rising Treasury yields, ETF outflows and renewed rate-hike pricing as the backdrop behind a sharp reversal across digital assets.<\/p>\n
\u201cLast week we said we\u2019d find out fast what kind of rally this was. We found out,\u201d Wintermute wrote<\/a>. \u201cBTC failed at the 200-day on the first real macro shock, which tells you it was the squeeze driving it all along.\u201d<\/p>\n The firm\u2019s update framed the week as a macro-led repricing. April CPI came in at 3.8% year over year<\/a>, above the 3.7% consensus estimate, while core CPI rose 0.4% month over month. Wintermute said the inflation shock has become harder for markets to dismiss, noting that the prolonged energy shock is now moving into core inflation and that real wages turned negative for the first time in three years.<\/p>\n Rates responded quickly. The 10-year Treasury yield rose 28 basis points on the week to 4.58%, its highest level since September 2025, while fed funds futures erased all expected cuts for 2026 and began pricing a 44% chance of a rate hike by December, up from 22.5% a week earlier. Wintermute said the market narrative shifted from \u201cwhen do they cut\u201d to \u201cdo they hike\u201d in only five trading days.<\/p>\n That repricing hit long-duration assets. Wintermute said 20-year-plus Treasuries fell 2.8%, while gold dropped 3.8% despite the geopolitical backdrop. Brent crude rose 8.6%, leaving the firm to conclude that \u201cthe only things that worked were the things causing the problem.\u201d<\/p>\nWhy $75,000 Bitcoin Is The Line In The Sand<\/h2>\n