Bitcoin on the verge of $50,000: Wintermute analysts warn of a new round of correction
Despite a recent bounce from the $60,000 zone, the market for the leading cryptocurrency is far from stabilizing. Leading analysts at market maker Wintermute do not rule out a retest of levels near $50,000. Contrary to optimistic sentiment following the break of a four-week losing streak, fundamental capital flows have yet to show a reversal.
What is behind the bounce?
Bitcoin's rise above $65,000 last week was driven by two key factors that, for the first time in a long while, worked in unison. First, May U.S. inflation data (CPI) met expectations at 4.2%, allaying fears among debt market participants of higher readings. Core inflation meanwhile slowed to 2.9%, signaling that the peak of the energy impulse has passed.
Second, the geopolitical risk premium dropped sharply amid news of the end of the conflict between the U.S. and Iran. An agreement to open the Strait of Hormuz and lift the naval blockade, scheduled to be signed on June 19 in Switzerland, sent Brent crude oil tumbling. Over the month, prices fell from $110 to levels above $80, losing 6.6% in the last week alone.
This tandem — a positive CPI surprise and de-escalation in the Middle East — created a powerful tailwind for risky assets. However, as I have repeatedly noted, such "relief" rallies are rarely sustainable without being fueled by real capital.
Why the bottom hasn't been reached?
The key question, according to Wintermute, is liquidity. Bitcoin remains a macro asset that grows solely on excess liquidity flowing through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DAT). At this point, none of them show a reversal.
Assets under management of DAT companies have shrunk from $220 billion to $140 billion. 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.
The last cycle showed that real growth begins with ETF approval and institutional capital inflows. Currently, institutions remain on the sidelines, while retail investors are engrossed in trading leveraged stocks and funds. Until a reversal occurs in these flows, declaring a bottom is 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 holder base. Nevertheless, I agree with Wintermute analysts: we cannot rule out Bitcoin moving into the $50,000 zone before the situation improves. The market has not yet undergone a full cleansing, and selling pressure could intensify in the coming weeks.