Wintermute Analysis: Bitcoin risks falling to $50,000 despite the rebound
Despite Bitcoin (BTC) breaking its prolonged losing streak last week and rebounding from the $60,000 zone back above $65,000, leading market maker Wintermute warns that this is no reason to relax. In their recent analysis, the company's strategists point out that the attractive risk-reward ratio around $60,000 does not mean the market bottom is already behind us. According to their estimates, BTC could still drop to levels near $50,000.
What Pushed the Market Up
The key catalysts for the rebound were two factors that, for the first time in a long while, worked in unison. First, the May US inflation data: the annual CPI came in at 4.2%, matching expectations. As analysts note, the market feared the worst, and the alignment with the forecast relieved some tension. More importantly, core inflation slowed to 2.9%, indicating that the energy impulse has likely passed its peak.
Second, and this is a more significant factor, is the de-escalation of the conflict between the US and Iran. The parties announced a deal to reopen the Strait of Hormuz, leading to a collapse in Brent oil prices—from $110 to $80 per month (a 6.6% drop over the week). The reduction in the geopolitical risk premium pulled down government bond yields and the dollar, while cheaper oil directly improves inflation forecasts.
Why the Bottom Has Not Been Reached Yet
The main question, according to Wintermute, is when the market will turn, and the answer lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity flowing through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DAT). None of them show signs of a reversal yet.
Assets under management of DAT companies have shrunk from about $220 billion to $140 billion, and the inflow of new capital beyond Strategy, Bitmine, and Strive has almost stopped. Exchange-traded funds are experiencing their longest series of outflows since launch, while inflows into stablecoins are following the same downward trajectory.
As strategists remind us, the previous cycle only truly started with ETF approval and institutional capital inflows. Currently, institutions 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 View on the Situation
I fully agree with Wintermute's logic: the current rebound is technical and news-driven, not fundamental. Sustainable growth requires a real inflow of fresh capital, not just the absence of bad news. The attractive risk-reward ratio in the $60,000 zone is a long-term argument for accumulation, but in the short term, the market could easily test $50,000 before finding support. I advise traders to watch not the price, but capital flows—they are currently the only reliable indicator.