Analytical Review: Bitcoin May Test the $50,000 Zone — Wintermute Warning
The market experienced a local bounce, but in my deep conviction, it's too early to relax. Analysts from one of the largest market makers, Wintermute, warn that Bitcoin (BTC) could continue its decline down to levels near $50,000. The recent bounce from the $60,000 zone and the return above $65,000 is merely a temporary respite, not a trend reversal.
Last week, BTC broke a four-week streak of declines. This was driven by two key factors that, for the first time in a long while, worked in sync.
Factor #1: Inflation and Macroeconomics
May US inflation data showed that the annual Consumer Price Index (CPI) stood at 4.2% — the highest since April 2023. However, this figure matched market expectations, which proved decisive. Debt market participants feared higher numbers, and the alignment with the forecast eased some of the tension. Meanwhile, the core inflation index slowed to 2.9%, indicating that the peak of the energy impulse has passed.
Factor #2: Geopolitical Easing
The second, and in my view more significant, factor is the resolution of the conflict between the US and Iran. After more than 100 days of confrontation, the parties reached an agreement to open the Strait of Hormuz and lift the naval blockade. Formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil has plummeted from $110 to levels above $80 over the past month, losing 6.6% in a week.
The reduction in the geopolitical risk premium has pulled down the dollar and government bond yields. Cheap oil directly improves inflation forecasts, so the CPI data and the conflict resolution this week did not cancel each other out but rather amplified one another. I see the first Federal Reserve meeting under Kevin Warsh's leadership on June 17 as the nearest catalyst.
Why the Bottom Hasn't Been Reached Yet
The main question, according to Wintermute, is when the market will turn around. The answer lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding crypto (DAT). None of these channels have shown a reversal yet.
Assets under management of DAT companies have fallen from roughly $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, new capital raising has virtually ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch, while inflows into stablecoins are following the same downward trajectory.
Wintermute reminded us how the last cycle began: real growth started with the ETF approval in early 2024 and the capital inflows that approval brought. Currently, institutional participants remain on the sidelines, while retail investors are busy trading stocks and leveraged funds. Until a reversal occurs, declaring that the bottom has been reached is, in my opinion, premature.
Wintermute's main advice is to watch capital flows, not price or headlines. The risk-reward ratio in the low $60,000 range looks attractive in the long term, and each sell-off leaves a more resilient base of holders. Nevertheless, I do not rule out that Bitcoin could drop into the $50,000 zone before the situation improves.
My comment: The market is in a consolidation phase, and $50,000 is not just a psychological level but a zone where a new base for the next bull cycle will form. Investors should prepare for volatility, not a quick recovery.