Wintermute Analysis: Bitcoin may test the $50,000 zone — the bottom has not yet been reached
Despite the recent bounce of the first cryptocurrency from the $60,000 support level, analysts at market maker Wintermute warn that the bearish scenario for Bitcoin (BTC) is far from over. In my assessment, the current market situation is extremely unstable, and the risks of a renewed decline remain high.
Two catalysts for the bounce
Last week, BTC broke a four-week losing streak, bouncing from the $60,000 mark back to levels above $65,000. This momentum was driven 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 Consumer Price Index (CPI) came in at 4.2%, matching market expectations. Debt market participants had feared a higher reading, and the alignment with forecasts eased some of the tension. Meanwhile, the core inflation rate slowed to 2.9%, signaling that the peak of the energy impulse has passed rather than accelerating further.
The second, and more significant factor, is the de-escalation of the geopolitical conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal: the unblocking of the Strait of Hormuz and the lifting of the naval blockade. Formal signing is scheduled for June 19. Against this backdrop, Brent crude oil has plunged from $110 to levels above $80 over the past month, losing 6.6% for the week.
The reduction in the geopolitical risk premium has pulled down the dollar and government bond yields. Cheaper oil directly improves the inflation outlook, so the CPI data and the cessation of the conflict this week reinforced each other rather than canceling out. I identify the first Federal Reserve meeting under Kevin Warsh's leadership on June 17 as the nearest catalyst.
Why the bottom has not yet been reached
The main question, in my opinion, is when the market will turn around, 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 public companies holding cryptocurrencies (DAT). None of them are turning around yet.
Assets under management of DAT companies have fallen from approximately $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, the attraction of new capital has nearly ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch, and the inflow of funds into stablecoins is following the same downward trajectory.
How the last cycle began: real growth started with the approval of ETFs in early 2024 and capital inflows. Now, institutional participants remain on the sidelines, while retail investors are busy trading stocks and leveraged funds. Until a turnaround occurs, it is premature to declare that the bottom has been reached.
My main advice is to watch capital flows, not 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 that Bitcoin could move into the $50,000 zone before the situation improves.
Expert commentary: As an analyst, I believe the current bounce is not a trend reversal but a temporary correction amid declining geopolitical risks. Until institutional demand returns and liquidity begins to grow, Bitcoin remains vulnerable to retesting levels near $50,000. Investors should be prepared for increased volatility and not succumb to euphoria from short-term movements.