Analytical Review: Bitcoin risks entering the $50,000 zone despite the rebound — Wintermute's opinion
The market for the leading cryptocurrency is showing volatility, but the recent bounce from the $60,000 level is not a signal that the correction is over. My analysis of data from leading market maker Wintermute indicates that BTC may retest the $50,000 zone before a sustainable bottom forms.
Last week, Bitcoin broke its prolonged four-week losing streak, bouncing off support around $60,000 and returning to levels above $65,000. This momentum was supported by two key macroeconomic factors that, for the first time in a long while, worked in synergy.
Macroeconomic Tandem: CPI and Geopolitics
The first factor is the US inflation data for May. The annual Consumer Price Index (CPI) came in at 4.2%, the highest since April 2023 and the third consecutive acceleration. However, the figure matched the consensus forecast. In my assessment, this was the key point: market participants had priced in a higher result, but their fears did not materialize. Meanwhile, core inflation slowed to 2.9%, indicating that the peak of the energy impulse has passed, rather than accelerating further.
The second, even more significant factor is the de-escalation of the conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal that includes the unblocking of the Strait of Hormuz. The formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil has collapsed from levels above $110 to around $80 per barrel over the past month, losing 6.6% just last week.
The reduction in the geopolitical risk premium has pulled down the dollar and government bond yields. Cheaper oil directly improves inflation expectations, so the CPI data and the end of the conflict did not cancel each other out this week but rather reinforced one another. I see the first Federal Reserve meeting under Kevin Warsh on June 17 as the nearest catalyst.
Why the Bottom Has Not Yet Been Reached
The main question I ask myself as an analyst 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 shrunk from approximately $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, the attraction of new capital has virtually ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch, and the inflow of funds into stablecoins is following the same downward trajectory.
Let me remind you how the last cycle began: real growth started with the approval of ETFs in early 2024 and the capital inflow that it brought. Now, institutional participants are staying on the sidelines, while retail investors are busy trading stocks and leveraged funds. Until a reversal occurs in these flows, declaring that the bottom has been reached is, in my opinion, premature.
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 that Bitcoin could move into the $50,000 zone before the situation improves.
My expert assessment: The market is in a consolidation phase, and the current bounce is more of a technical correction than the start of a new bullish trend. Investors should focus on monitoring capital flows rather than price headlines. Until institutional money returns to ETFs and stablecoins, any rally will be vulnerable to retesting the lows.