Analysts warn: Bitcoin may test the $50,000 zone despite the current rebound
The cryptocurrency market is experiencing a moment of false calm. Despite Bitcoin (BTC) breaking a four-week losing streak last week and rebounding from the $60,000 zone back to levels above $65,000, leading analysts warn that the bottom has not yet been reached. My analysis of the current situation and available data confirms that the risks of a renewed decline remain extremely high.
Two factors that changed market sentiment
The key catalyst for the rebound was the May US inflation data. The Consumer Price Index (CPI) came in at 4.2% year-over-year — the highest since April 2023 and the third consecutive acceleration. However, the figure matched market expectations, which came as a positive surprise for debt market participants. Core CPI slowed to 2.9%, indicating that the energy impulse has already passed its peak and is not accelerating further.
The second, and perhaps more significant, factor is the de-escalation of the geopolitical conflict between the US and Iran. The parties have reached a fundamental agreement on opening the Strait of Hormuz and lifting the naval blockade. Formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil has collapsed 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 has dragged down the dollar and government bond yields. Cheaper oil directly improves the inflation outlook. Thus, the CPI data and the cessation of the conflict worked in unison, amplifying the positive effect rather than canceling each other out.
Why it's premature to talk about a bottom
The main question facing the market now is when a reversal will occur, 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 these channels have yet shown a reversal.
Assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion, and new capital raising beyond Strategy, Bitmine, and Strive has virtually ceased. ETFs are experiencing their longest streak of outflows since launch. Inflows into stablecoins are also on a downward trajectory.
It's worth recalling how the previous cycle began: real growth started with the approval of ETFs in early 2024 and the subsequent capital inflow. Now, institutions remain on the sidelines, and retail investors are focused on trading leveraged stocks and funds. Until a reversal in capital flows occurs, declaring that the bottom has been reached is premature.
My analysis: the $50,000 zone as a realistic scenario
The risk-reward ratio in the low $60,000 range looks attractive in the long term. Each sell-off leaves behind a more resilient holder base. However, I fully share the view that Bitcoin could fall to the $50,000 zone before the situation improves.
My advice: watch capital flows, not price or loud headlines. Until institutional investors return to the market, every local rebound is merely an opportunity for hedge funds and market makers to reload short positions. The bottom will only be reached when we see sustained inflows into ETFs and stablecoins. Until then, any rally is a bear market bounce within a downtrend.