Bitcoin on the verge of $50,000: Wintermute analysts warn of the risk of a new bottom
This week, bitcoin (BTC) managed to break its prolonged losing streak, bouncing from the $60,000 zone back to levels above $65,000. However, as my own research and data from market maker Wintermute show, it is too early to relax. An attractive risk-reward ratio in the $60,000 range does not at all mean that the market bottom has already been reached. On the contrary, we see a scenario in which BTC could retest the $50,000 level.
Two catalysts for the bounce: inflation and geopolitics
The bounce was driven by two factors that, for the first time in a long while, worked in unison. First, the May US inflation data. The annual Consumer Price Index (CPI) came in at 4.2% — the highest since April 2023, but in line with expectations. The market had feared a higher reading, and its confirmation became a psychological trigger. Core inflation, meanwhile, slowed to 2.9%, indicating that the peak of the energy impulse has passed. Second, the end of the conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal, leading to a collapse in Brent oil from $110 to levels above $80 within a month. The reduction in the geopolitical premium pulled down the dollar and government bond yields, creating a favorable backdrop for risk assets.
I consider the first Federal Reserve meeting under Kevin Warsh on June 17 to be the nearest catalyst. It will set the tone for the coming weeks.
Why the bottom hasn't been reached yet: liquidity is not turning around
The key question 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 have shown a reversal yet. Assets under management of DAT companies have fallen from $220 billion to $140 billion, and the attraction of new capital beyond Strategy, Bitmine, and Strive has virtually ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch, and inflows into stablecoins are following the same downward trajectory.
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 that the bottom has been reached. My advice: watch capital flows, not price or headlines. Each sell-off leaves a more resilient base of holders, but this does not negate the risk of a move to the $50,000 zone before the situation improves.
Expert commentary: In current conditions, BTC looks like an asset that is "digesting" excess liquidity, but without fresh capital from institutions, we risk seeing another legitimate test of $50,000. This is not panic, but a strategic reality — long-term investors can use such levels for accumulation, but short-term traders should keep hedges in place.