Analysts at Wintermute warn: Bitcoin may test the $50,000 zone
Despite a recent bounce from the psychological level of $60,000, the market for the leading cryptocurrency is far from stabilizing. Based on my assessment, grounded in a deep analysis of macroeconomic indicators and capital flows, the current upward momentum is merely a temporary respite, not a trend reversal. Leading market experts, including analysts at Wintermute, agree that Bitcoin (BTC) could still test levels near $50,000.
Last week, BTC broke its prolonged four-week losing streak, bouncing from the $60,000 zone and returning above $65,000. This rebound was supported by two important factors that, for the first time in a long while, aligned in the same direction.
What Catalyzed the Rebound?
The first factor is the May US inflation data. The annual Consumer Price Index (CPI) came in at 4.2%, marking the highest level since April 2023 and the third consecutive acceleration. However, this figure matched market expectations. This, I believe, was key: debt market participants had feared a higher reading, and its confirmation relieved some pressure. Core inflation, meanwhile, slowed to 2.9%, indicating that the peak of the energy impulse has passed rather than accelerating further.
The second, and in my view more significant, factor is the de-escalation of the geopolitical conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a preliminary deal, which includes reopening the Strait of Hormuz and lifting the naval blockade. Official signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil has collapsed from levels above $110 to around $80 over the past month, losing 6.6% in the last week alone.
The reduction in the geopolitical risk premium, which had weighed on the market since late February, has pulled down the dollar and government bond yields. Cheaper oil directly improves the inflation outlook, so the CPI data and the end of the conflict this week reinforced each other rather than canceling out. I see the first Federal Reserve meeting under Kevin Warsh's leadership on June 17 as the next catalyst.
Why Has the Bottom Not Been Reached Yet?
The main question facing the market now is when the reversal will occur. The answer lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity flowing through three key channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DAT). None of these are showing signs of a reversal yet.
Assets under management of DAT companies have shrunk from roughly $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, new capital raising has virtually ceased. ETFs are experiencing their longest streak of outflows since launch, while inflows into stablecoins are following the same downward trajectory.
It's important to remember how the last cycle began: real growth started with the approval of ETFs in early 2024 and the subsequent capital inflows. Now, institutional participants remain on the sidelines, and retail investors are focused on trading leveraged stocks and funds. Until a reversal occurs in these flows, declaring a bottom, in my opinion, is premature.
My advice: 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 Bitcoin moving into the $50,000 zone before the situation improves. The market has not yet completed its full cleansing cycle.