Analysts suggest bitcoin could fall to $50,000: fundamental reasons and hidden risks
Despite the recent bounce of the first cryptocurrency from the $60,000 zone back to levels above $65,000, calling it a market bottom is premature. My analysis of capital flows and the macroeconomic backdrop indicates that bitcoin (BTC) could very well make another deep dive — down to levels near $50,000.
Two Growth Catalysts That Worked in Sync
Last week, we witnessed a rare event: two powerful factors worked in the same direction, interrupting BTC's four-week decline. First, the May US inflation data (CPI) showed 4.2% year-over-year — the highest since April 2023. But the key point was that the figure matched expectations. The bond market had priced in higher numbers, and when they didn't materialize, the tension eased. Core inflation meanwhile slowed to 2.9%, signaling that the energy impulse has peaked and is not accelerating further.
Second, and in my view even more significant, was the resolution of the prolonged conflict between the US and Iran. The parties agreed to open the Strait of Hormuz and lift the naval blockade, with the official signing scheduled for June 19 in Switzerland. On this news, Brent crude collapsed from $110 to levels above $80 over the past month, losing 6.6% in just one week. The reduction in the geopolitical risk premium pulled down the dollar and government bond yields, while cheaper oil directly improves inflation forecasts. These two events — the CPI data and the de-escalation — did not cancel each other out but mutually reinforced one another.
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). Right now, none of them show signs of a reversal.
Assets under management of DAT companies have shrunk from roughly $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, the attraction of new capital has virtually stopped. Exchange-traded funds are experiencing their longest streak of outflows since their launch. Inflows into stablecoins are also on a downward trajectory.
Remember how the last cycle began: real growth started with the approval of ETFs in early 2024 and the capital inflows that approval brought. Currently, institutions remain on the sidelines, while retail investors are busy trading leveraged stocks and funds. Until a reversal occurs, declaring a bottom is premature.
My View on the Prospects
The risk-reward ratio in the low $60,000 range looks attractive over the long term, and each sell-off leaves a more resilient base of holders. However, I do not rule out that bitcoin will first move into the $50,000 zone before the situation improves. The key near-term catalyst is the first Federal Reserve meeting under Kevin Warsh on June 17. Watch the capital flows, not the headlines.