Wintermute Analysis: Bitcoin risks falling into the $50,000 zone despite the rebound
The Bitcoin (BTC) market experienced a short-term relief, breaking a four-week losing streak and bouncing from the $60,000 zone back above $65,000. However, as my calculations and capital flow analysis show, calling this a bottom would be premature. Leading market maker Wintermute suggests that selling pressure may continue, and BTC could test levels near $50,000.
Two factors that offered hope
Last week brought two positive events for risk assets, coinciding for the first time in a long period. First, May US inflation data came in exactly at expectations (4.2% annualized), dispelling market fears of a higher reading. Importantly, core inflation slowed to 2.9%, indicating the peak of the energy impulse has passed. Second, the geopolitical conflict between the US and Iran, lasting over 100 days, ended with a preliminary deal to unblock the Strait of Hormuz. This led to a collapse in Brent oil prices from $110 to levels above $80 over the past month.
The reduction in the geopolitical risk premium dragged down the dollar and government bond yields, which is traditionally positive for cryptocurrencies. However, in my opinion, this is only a temporary respite. The key catalyst—the first Federal Reserve meeting under Kevin Warsh's leadership on June 17—could once again intensify volatility.
Why the bottom has not yet been reached
The main question now is when capital will start returning, and the answer lies in liquidity. Bitcoin grows on excess liquidity through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding crypto (DAT). None of them show a reversal yet.
My observations confirm: assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion, and new capital raising beyond Strategy, Bitmine, and Strive has virtually halted. Exchange-traded funds are experiencing their longest streak of outflows since launch, while inflows into stablecoins follow the same downward trajectory. Institutional participants remain on the sidelines, and retail investors are focused on trading stocks and leveraged funds.
The market is repeating the scenario of the previous cycle: real growth only began after the ETF approval in early 2024 and the subsequent capital inflow. Until this happens, declaring a bottom means ignoring fundamental flows.
My conclusion: 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. However, I do not rule out that Bitcoin could drop to the $50,000 zone before the situation improves. Watch capital flows, not headlines.