Wintermute warns: Bitcoin could crash to $50,000 despite the rebound
The Bitcoin market experienced a short-term respite, breaking a four-week losing streak and rebounding from the $60,000 zone back above $65,000. However, in my firm belief, based on an analysis of capital flows and macroeconomic data, it is premature to talk about a trend reversal. Leading market analysts, particularly strategists at Wintermute, indicate that the bottom has not yet been reached, and we could see Bitcoin near the $50,000 mark.
Two catalysts for the rebound: inflation and geopolitics
The rebound was triggered by two key factors that, for the first time in a long while, worked in unison. First, the May US inflation data. The annual Consumer Price Index (CPI) came in at 4.2%, matching market expectations. Debt market participants had feared a higher reading, and the alignment with the forecast eased some of the tension. Meanwhile, the core inflation rate slowed to 2.9%, signaling that the peak of the energy impulse has passed.
Second, and this is a more significant factor, the prolonged conflict between the US and Iran came to an end. The parties agreed to open the Strait of Hormuz and lift the naval blockade. The formal signing of the agreement is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil has plummeted from levels above $110 to around $80 over the past month, losing 6.6% in just the last week. The reduction in the geopolitical risk premium has pulled down government bond yields and the dollar, creating a favorable environment for risk assets.
Why the bottom hasn't been reached: liquidity remains silent
The key question I ask myself and my colleagues is: when will the market turn around? 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 crypto-holding companies (DATs). Right now, none of these channels show a reversal.
Assets under management of DAT companies have shrunk from $220 billion to $140 billion. The attraction of new capital beyond Strategy, Bitmine, and Strive has virtually stalled. Exchange-traded funds are experiencing their longest streak of outflows since launch, and inflows into stablecoins are following the same downward trajectory.
Institutional participants remain on the sidelines, while retail investors are focused on trading stocks and leveraged funds. Until a reversal occurs in these flows, declaring that the bottom has been reached is premature.
Outlook and strategy
The risk-reward ratio in the low $60,000 range looks attractive over the long term, and each sell-off leaves a more resilient base of holders. However, as I have noted, we do not rule out a scenario where Bitcoin drops into the $50,000 zone before the situation improves.
My expert opinion: The market is in a consolidation phase with a downward bias. The key signal for entry is not price, but a resumption of capital inflows into ETFs and stablecoins. Until then, there remains a high probability of testing the $50,000–$52,000 levels. Investors should be patient and not succumb to emotions from short-term rebounds.