Market Analysis: Bitcoin risks falling into the $50,000 zone despite the recent rebound
The cryptocurrency market is experiencing a moment of uncertainty. Despite Bitcoin (BTC) managing to break its prolonged four-week losing streak last week and bouncing from the $60,000 zone back to levels above $65,000, leading analysts warn that this is not yet a trend reversal. My analysis of the consensus among market professionals points to a high probability of a retest and even a breakout toward the $50,000 range.
The key drivers of the recent rally were two macroeconomic events that, for the first time in a long while, worked in synergy. First, the May US inflation data (CPI) showed an annual increase of 4.2%. This figure matched market expectations, which came as a positive surprise to participants who had feared higher values. Core CPI meanwhile slowed to 2.9%, signaling that the peak of the energy impulse has passed.
Second, and in my view a more significant factor, was the resolution of the prolonged geopolitical conflict between the US and Iran. The agreement to unblock the Strait of Hormuz, scheduled for signing on June 19, led to a collapse in Brent oil prices. Over the week, it lost 6.6%, plummeting from levels above $110 to around $80 per barrel. The decline in the geopolitical risk premium directly improved inflation expectations and pushed down government bond yields and the US dollar. These two factors—CPI data and de-escalation in the Middle East—only reinforced each other, creating a favorable backdrop for risk assets, including Bitcoin.
Why I Don't Believe the Bottom Is In
Despite the positive momentum, fundamental drivers for sustained growth are still absent. The main question now is liquidity. Bitcoin remains a macro asset that grows on excess liquidity flowing through three channels: stablecoins, exchange-traded ETFs, and public holding companies (DAT). Analysis shows that none of these channels are showing signs of a reversal.
Assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion, and new capital raising outside of 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. Institutions remain on the sidelines, while retail investors have shifted to trading stocks and leveraged funds.
Until we see a resumption of capital inflows through these channels, any rally will only be a temporary respite. Each sell-off certainly strengthens the holder base, making the market more resilient. The risk-reward ratio in the low $60,000 range looks attractive in the long term, but that does not negate the risk of further declines.
My conclusion: I agree with my colleagues—before the situation improves, Bitcoin could move into the $50,000 zone. The key catalyst for this will be the first Federal Reserve meeting under Kevin Warsh on June 17. What to watch is not the headlines, but the capital flows. They will indicate the true market reversal.