Wintermute analysts: Bitcoin may test the $50,000 zone despite the rebound
Last week, Bitcoin (BTC) broke its prolonged downtrend and bounced back from support around $60,000 to levels above $65,000. However, based on my in-depth analysis and data from market maker Wintermute, it is premature to call this the market bottom. The attractive risk-reward ratio in the long term does not rule out the possibility of a retest of lower levels.
What triggered the bounce
The key catalyst for the rally was the May U.S. inflation data. The annual Consumer Price Index (CPI) came in at 4.2% — the highest since April 2023, but it matched market expectations. This factor proved decisive: debt market participants were bracing for worse, and the confirmation of forecasts relieved excessive pressure. Core inflation, meanwhile, 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 U.S. and Iran. After more than 100 days of confrontation, the parties reached an agreement to reopen the Strait of Hormuz and lift the naval blockade. Formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil plunged from $110 to levels above $80 over the past month, losing 6.6% in the last week alone.
The reduction in the geopolitical risk premium dragged down the dollar and government bond yields. Cheaper oil directly improves inflation forecasts, so the CPI data and the de-escalation of the conflict this week reinforced rather than offset each other. I see the first Federal Reserve meeting under Kevin Warsh on June 17 as the next catalyst.
Why the bottom has not been reached yet
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 publicly traded crypto-holding companies (DATs). None of them show a reversal yet.
Assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, new capital inflows have virtually ceased. ETFs are experiencing their longest streak of outflows since launch, while stablecoin inflows follow the same downward trajectory.
As I have repeatedly noted, the previous cycle began with ETF approval in early 2024 and subsequent capital inflows. Now, institutional participants remain on the sidelines, while retail investors are busy trading leveraged stocks and funds. Until a reversal occurs, it is premature to declare the bottom.
My conclusion
I recommend monitoring capital flows rather than price or headlines. The risk-reward ratio in the low $60,000 range looks attractive in the long term, and each sell-off leaves a more resilient base of holders. Nevertheless, I do not rule out Bitcoin dropping into the $50,000 zone before conditions improve. The market has not yet undergone a full capitulation phase, and without a clear signal from institutions, any rally will be vulnerable to a correction.