Bitcoin under threat: Analysts warn of possible drop to $50,000
The cryptocurrency market is going through a difficult period, and despite the recent rebound of the first cryptocurrency, it's too early to relax. In my assessment, based on a deep analysis of capital flows and the macroeconomic picture, Bitcoin (BTC) could still face a serious correction to the $50,000 area. The current attractiveness of the risk/reward ratio in the $60,000 zone is no guarantee that the bottom is already behind us.
What's behind the recent rebound?
Last week, Bitcoin broke its prolonged downtrend, bouncing from the $60,000 zone back above $65,000. This momentum was supported by two key factors that, for the first time in a long while, worked in unison.
The first is the May US inflation data. The annual Consumer Price Index (CPI) came in at 4.2%, matching market expectations. The key point was that debt market participants had feared a higher reading, and its absence relieved some of the tension. Meanwhile, the core inflation rate slowed to 2.9%, indicating that the peak of the energy impulse has passed.
The second, and more significant factor, is the de-escalation of the geopolitical conflict between the US and Iran. The parties agreed to lift the naval blockade and open the Strait of Hormuz, leading to a sharp drop in Brent oil prices. Over the past month, black gold has fallen from $110 to levels above $80, losing 6.6% in just the last week. The reduction in the geopolitical premium pulled down the dollar and government bond yields, creating a favorable backdrop for risk assets.
Why is $50,000 a realistic scenario?
Despite the positive signals, the key question—when will the market turn—remains open. The answer lies in liquidity. Bitcoin, as a macro asset, grows on excess liquidity flowing through three main channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DAT).
Currently, none of these channels show signs of a reversal. Assets under management at DAT companies have shrunk from $220 billion to $140 billion, and the attraction of new capital has virtually stopped. Exchange-traded funds are experiencing their longest streak of outflows since launch, while inflows into stablecoins are on a downward trajectory.
Institutional investors remain on the sidelines, and retail traders have shifted to trading stocks and leveraged funds. Until these flows reverse, it is premature to declare that the bottom has been reached.
My conclusion
I recommend that traders and investors focus not on price or headlines, but on capital flows. The risk/reward ratio in the low $60,000 area looks attractive in the long term, and each sell-off leaves a more resilient base of holders. However, given the current liquidity dynamics and the lack of new catalysts, I do not rule out that Bitcoin could drop into the $50,000 zone before the situation fundamentally improves. The market has not yet undergone a full cleansing.