The market at a crossroads: Wintermute allows for a bitcoin drop to $50,000
Despite the recent bounce of the first cryptocurrency from the $60,000 zone, it is premature to talk about a bottom being reached. Analysts at market maker Wintermute warn: the current attractiveness of the risk/reward ratio near $60,000 does not guarantee that the worst is over. On the contrary, there remains a high probability of a retest and even bitcoin moving into the $50,000 zone.
Two factors behind the bounce and their true nature
Last week, BTC interrupted a prolonged series of declines, bouncing from $60,000 back to levels above $65,000. This momentum was supported by two key factors that, for the first time in a long while, worked synergistically. The first is the May US inflation data. The annual CPI stood at 4.2%, matching market expectations, which had feared a higher figure. The core index, in turn, slowed to 2.9%, indicating that the peak of the energy impulse has passed, rather than accelerating further.
The second and more significant catalyst is the de-escalation of the geopolitical conflict between the US and Iran. The parties announced a deal to open the Strait of Hormuz, leading to a collapse in Brent oil prices by more than 6% over the week — from $110 to levels above $80. The reduction in the geopolitical risk premium pulled down government bond yields and the dollar, creating a favorable backdrop for risk assets. However, as I note, these factors are one-off in nature and do not form a sustainable trend.
Why the bottom has not yet been reached: a look at liquidity
The key question now is not price, but liquidity. Bitcoin remains a macro asset that grows solely on excess liquidity flowing through three channels: stablecoins, exchange-traded funds (ETFs), and the balance sheets of public holding companies (DAT). At the moment, none of these channels show a reversal. Assets under management of DAT companies have shrunk from $220 billion to $140 billion, ETF inflows are experiencing the longest streak of outflows since launch, and the dynamics of stablecoin market capitalization remain on a downward trajectory.
Institutions remain on the sidelines, retail investors are captivated by trading stocks and leveraged funds. Until a reversal occurs in these flows, declaring that a bottom has been reached is, in my opinion, premature. Each sell-off leaves behind an increasingly resilient base of holders, but this does not negate the risk of further correction.
Cryptalist expert summary: The situation resembles a "bull trap" — a bounce against the backdrop of positive but one-off news. Until we see a sustained resumption of capital inflows into ETFs and stablecoins, every local rise will be an opportunity for shorts. The $50,000 zone is not a catastrophic scenario, but a realistic market overload point where a true bottom for a new cycle could form.