Market Analysis: Bitcoin Risks Dropping to $50,000 Zone Despite Bounce — Expert Review
Despite a recent recovery above $65,000, the current market configuration leaves Bitcoin (BTC) vulnerable to retesting levels near $50,000. This conclusion follows an analysis of capital flows and macroeconomic triggers that have synchronized in recent weeks, creating an illusion of stabilization without eliminating underlying risks.
Last week, BTC broke its prolonged four-week decline streak, bouncing from the $60,000 zone back to levels above $65,000. This momentum resulted from the convergence of two key factors that, for the first time in a while, moved in the same direction.
The first catalyst was the May US inflation data. The annual Consumer Price Index (CPI) stood at 4.2% — the highest since April 2023 and the third consecutive acceleration, yet the figure matched the consensus forecast. It was this alignment, rather than the value itself, that proved critical: debt market participants had priced in a higher result, and their fears did not materialize. Core inflation meanwhile slowed to 2.9%, indicating the peak of the energy impulse has passed rather than accelerating further.
The second, and more significant, factor was the de-escalation of the geopolitical conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal involving the opening of the Strait of Hormuz and the lifting of the naval blockade. Formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil plummeted from levels around $110 to above $80 over the past month, losing 6.6% in the last week alone.
The decline in the geopolitical premium dragged 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 did not cancel each other out but rather reinforced one another. I see the first Federal Reserve meeting under Kevin Warsh's leadership on June 17 as the nearest catalyst — that is where the market will seek confirmation of a policy shift.
Why the bottom has not yet been reached
The main question now is when the market will turn, and the answer lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DAT). None of them are turning around yet.
Assets under management of DAT companies have fallen from approximately $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, new capital raising has virtually ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch, while inflows into stablecoins are following the same downward trajectory.
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 busy trading stocks and leveraged funds. Until a reversal occurs, it is premature to declare the bottom has been reached.
My expert assessment: The risk-reward ratio in the low $60,000 range looks attractive in the long term, and each sell-off leaves a more resilient holder base. However, I do not rule out Bitcoin moving into the $50,000 zone before the situation improves. The key advice is to watch capital flows, not price or headlines. They will provide the signal for the start of a new upward trend.