Market Analysis: Bitcoin risks testing the $50,000 zone despite the rebound
The recent bounce of Bitcoin from the $60,000 level is not a signal that the bottom has been reached. On the contrary, the current macroeconomic and institutional picture indicates a high probability of retesting levels near $50,000. This scenario emerges from an analysis of capital flows and the behavior of key investor groups.
Last week, BTC managed to break its prolonged four-week losing streak, bouncing from the $60,000 zone back to levels above $65,000. This momentum was supported by two important factors that, for the first time in a long while, worked in unison.
Macroeconomic Tailwind
The first factor is the May US inflation data. The annual Consumer Price Index (CPI) stood at 4.2%, marking the highest value since April 2023. However, this figure matched market expectations. The key point was that debt market participants had feared higher numbers, and the alignment with the forecast relieved some of the tension. Meanwhile, the core inflation rate slowed to 2.9%, indicating that the peak of the energy impulse has passed.
The second, and more significant, factor is the de-escalation of the geopolitical conflict between the US and Iran. The parties reached a preliminary agreement on opening the Strait of Hormuz and lifting the naval blockade. Formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil plummeted from levels above $110 to around $80 per barrel, losing 6.6% in the last week alone.
The reduction in the geopolitical risk premium pulled down the dollar and government bond yields. Cheaper oil directly improves inflation forecasts, so the CPI data and the cessation of the conflict this week reinforced each other rather than canceling out. The next catalyst will be the first Federal Reserve meeting under Kevin Warsh's leadership on June 17.
Why the Bottom Has Not Yet Been Reached
The main question, in my assessment, is when the market will turn, and the answer lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity flowing through three channels: stablecoins, exchange-traded funds (ETFs), and publicly traded cryptocurrency-holding companies (DAT). At this point, none of these channels show a reversal.
Assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion. Except for Strategy, Bitmine, and Strive, the attraction of new capital has virtually ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch, and the inflow of funds into stablecoins is following the same downward trajectory.
It is worth recalling how the last cycle began: real growth started with the approval of ETFs in early 2024 and the subsequent capital inflow. Now, institutional participants remain on the sidelines, while retail investors are focused on trading stocks and leveraged funds. Until a reversal occurs in these flows, it is premature to declare that the bottom has been reached.
My recommendation is to monitor 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 move into the $50,000 zone before the situation improves. The market is cleansing itself, and this process may be deeper than most expect.