Wintermute Analysis: Bitcoin risks dropping to the $50,000 zone despite the rebound
Despite Bitcoin (BTC) breaking its prolonged downtrend last week and rebounding from the $60,000 zone back above $65,000, analysts at major market maker Wintermute urge caution against concluding that a bottom has been reached. According to their estimates, the risks of a renewed decline toward the $50,000 level remain high, and the current risk/reward ratio around $60,000 does not signal a trend reversal.
What triggered the rebound?
The key catalyst for the recovery was the May US inflation data. The annual Consumer Price Index (CPI) came in at 4.2%, matching market expectations, although it was the highest since April 2023. Debt market participants had feared a higher reading, and the alignment with forecasts eased some tension. Moreover, core inflation slowed to 2.9%, indicating that the peak of the energy impulse has passed rather than accelerating further.
The second, and more significant, factor was the resolution of the geopolitical conflict between the US and Iran. The parties agreed to open the Strait of Hormuz and lift the naval blockade, with the official signing of the agreement scheduled for June 19 in Switzerland. This led to a collapse in Brent oil prices — they plummeted from $110 to above $80 over the month, losing 6.6% in the last week alone.
The reduction in the geopolitical risk premium dragged down government bond yields and the US dollar. Cheaper oil directly improves inflation forecasts, so the CPI data and the de-escalation of the conflict worked synergistically, amplifying the positive effect. Wintermute identifies the first Federal Reserve meeting under Kevin Warsh, scheduled for June 17, as the next catalyst for the market.
Why hasn't the bottom been reached yet?
The main question, according to analysts, is when the market will turn, and the answer lies in liquidity. Bitcoin remains a macro asset that grows solely on excess liquidity flowing through three channels: stablecoins, exchange-traded funds (ETFs), and publicly traded crypto-holding companies (DAT). None of them have shown a reversal yet.
Assets under management of DAT companies have shrunk from $220 billion to $140 billion, and new capital raising outside of Strategy, Bitmine, and Strive has virtually halted. Exchange-traded funds are experiencing their longest streak of outflows since launch, while inflows into stablecoins follow the same downward trajectory.
Wintermute recalls how the last cycle began: real growth started with the approval of ETFs in early 2024 and the subsequent capital inflow. Currently, institutions remain on the sidelines, and retail investors are focused on trading stocks and leveraged funds. Until a reversal occurs, it is premature to declare that a bottom has been reached.
My expert opinion: The market is in a "weak hands washout" phase, and a drop to $50,000 is not a catastrophe but a natural process of capital redistribution. Investors should focus on fund flows rather than price headlines. Each sell-off leaves a more resilient holder base, and this is precisely what lays the foundation for the next bull rally.