Wintermute said Bitcoin could retest the $82,500 level after cryptocurrencies led gains among risk assets last week. Holding above that threshold matters because the firm views it as important confirmation of the recent breakout.

Cryptocurrencies outperformed other risk assets despite a rate increase and the yield on 10-year U.S. Treasuries rising above 5%, Wintermute experts said.

Bitcoin closed the week above its 50-week moving average for the first time since early November, according to the firm. Wintermute described the morning pullback following the breakout as the first test of the new trading range.

Bitcoin faces repeated test at $82,500

Wintermute identified $82,500 as the key level because it capped Bitcoin’s previous range for several weeks. The firm expects Bitcoin could test the threshold several times in succession.

If Bitcoin remains above $82,500, last week’s close above the 50-week moving average could provide a solid base for further gains, Wintermute said. A close below the level would call the recent breakout into question.

The firm expects Bitcoin’s market dominance to continue rising over the next few weeks if the market remains in a pattern of reaching fresh highs and extending the altcoin rally.

Market breadth also remains high, with more than 80% of tokens posting gains. Wintermute said that after breadth reached similar levels, the market traded sideways or declined in the following weeks in more than 80% of cases. However, the firm said the setup occurs more frequently during the early stages of a cycle, when positive momentum can continue.

In the options market, Wintermute is seeing increased demand for low-delta Bitcoin and Ethereum call options and call spreads expiring at year-end. The firm said the activity points to bullish positioning, although it does not consider discussion of new all-time highs to represent a clear target.

Oil and interest rates remain key risks

Wintermute considers macroeconomic conditions one of the main risks facing the crypto market. The firm is monitoring oil prices closely because they can affect expectations for monetary policy.

Brent crude is trading near $103 a barrel, while only part of pre-war supply volumes is passing through the Strait of Hormuz. Wintermute said that if oil remains near $100 or higher, markets will continue pricing in the possibility of another interest-rate increase in October.

The resulting question for risk assets, including cryptocurrencies, is how many additional rate increases they can withstand while the bond-market sell-off continues, according to the firm.

Wintermute also cited agreements between the United States and China following a meeting between Donald Trump and Xi Jinping. The trade truce was extended until Jan. 10, 2027, and the two sides agreed to reduce tariffs by about $30 billion each. Wintermute said the market received the agreements according to the “at least it didn’t get worse” principle.

The firm expects capital rotation among altcoin sectors to continue influencing the crypto market in the near term. However, Wintermute said continuation of the broader cycle requires Bitcoin to move higher and new capital to enter the market.

Until then, the firm sees mostly selective opportunities in altcoins. Wintermute expects macroeconomic factors to play an increasing role in determining the market’s direction toward the end of the quarter.

Santiment previously said large market participants had accumulated nearly 114,000 BTC since July.

Source: Incrypted