Market Analysis: Bitcoin may test the $50,000 zone despite the rebound
Despite the recent recovery and the interruption of a four-week losing streak, I believe the current market conditions are far from stable. My analysis, based on data from market maker Wintermute, indicates a high probability of Bitcoin retesting the $50,000 level.
Factors That Triggered the Bounce
Last week, BTC bounced from the $60,000 zone back above $65,000. This momentum was driven by two key events coinciding in the same direction. First, the US inflation data for May: the annual CPI came in at 4.2%, matching market expectations. Debt market participants had feared a higher reading, and the alignment with forecasts eased some tension. The core CPI index meanwhile slowed to 2.9%, which, in my assessment, signals that the peak of the energy impulse has passed.
Second, and in my view a more significant factor, is the conclusion of the geopolitical conflict between the US and Iran. The parties announced a deal to reopen the Strait of Hormuz and lift the naval blockade. The signing is scheduled for June 19. Against this backdrop, Brent crude oil plummeted from $110 to levels above $80 over the month, losing 6.6% in a week. The reduction in the geopolitical risk premium directly improves inflation prospects, which, in tandem with the CPI data, amplified the positive effect. I identify the first Federal Reserve meeting under Kevin Warsh's leadership on June 17 as the nearest catalyst.
Why the Bottom Has Not Yet Been Reached
The main question I am currently asking myself and the market is: when will capital flows reverse? Bitcoin remains a macro asset that grows exclusively on excess liquidity entering through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DAT). None of them have yet shown a reversal.
Assets under management of DAT companies have shrunk from $220 billion to $140 billion, and the inflow of new capital beyond Strategy, Bitmine, and Strive has virtually ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch. The inflow of funds into stablecoins is also on a downward trajectory.
I recall how the previous 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 engrossed in trading stocks and leveraged funds. Until a reversal occurs in these flows, declaring that a bottom has been reached is, in my opinion, premature.
My main advice: watch the capital flows, not the price or headlines. The risk-reward ratio in the low $60,000 range looks attractive in the long term, and each sell-off leaves an increasingly resilient base of holders. Nevertheless, I do not rule out that Bitcoin could move into the $50,000 zone before the situation improves.
Expert commentary from Cryptalist: The market is in a phase of cleansing excess leverage and reassessing macroeconomic risks. Until we see a sustained inflow of institutional capital through ETFs or corporate balance sheets, any rally will be of a technical bounce nature, rather than the start of a new bullish trend. The $50,000 level is not just a psychological mark, but a zone where a new bottom could form if the macroeconomic backdrop continues to deteriorate.