Analytical Review: Bitcoin risks testing the $50,000 zone despite the current rebound
The cryptocurrency market is going through a difficult period. Despite the recent bounce from $60,000 to levels above $65,000, I believe it is too early to relax. My analysis, based on data from leading market makers, indicates that Bitcoin (BTC) could make another move downward — into the zone around $50,000. An attractive risk-reward ratio in the long term does not mean the bottom is already behind us.
Last week, BTC broke its prolonged four-week losing streak. This bounce was supported by two key factors that, for the first time in a long while, worked in unison.
Macroeconomic Background: Relief, But Not a Reversal
The first factor was the US inflation data for May. The annual Consumer Price Index (CPI) came in at 4.2%, the highest since April 2023 and the third consecutive acceleration. However, this figure matched market expectations. The key point was that debt market participants had feared a higher reading. Core inflation meanwhile slowed to 2.9%, which, in my assessment, signals the passing of the peak of the energy impulse rather than its further acceleration.
The second and more important factor was the conclusion of the geopolitical conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal, which includes the opening of the Strait of Hormuz and the lifting of the naval blockade. Formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil has collapsed from levels around $110 to above $80 over the past month, losing 6.6% in the last week alone.
The reduction in the geopolitical risk premium pulled down the dollar and government bond yields. Cheaper oil directly improves the inflation outlook, so the CPI data and the resolution of the conflict did not cancel each other out this week but rather reinforced one another. I see the first Federal Reserve meeting under Kevin Warsh, scheduled for June 17, as the nearest catalyst.
Why the Bottom Has Not Yet Been Reached
The main question facing the market now is when the reversal will occur. The answer lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity flowing through three main channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DATs). None of them show signs of a reversal yet.
Assets under management of DAT companies have shrunk from roughly $220 billion to $140 billion, and the attraction of new capital beyond Strategy, Bitmine, and Strive has virtually stopped. Exchange-traded funds are experiencing their longest streak of outflows since launch, while inflows into stablecoins are following the same downward trajectory.
As the history of the last cycle shows, real growth only began with the approval of ETFs in early 2024 and the subsequent capital inflow. Currently, institutional participants remain on the sidelines, while retail investors are focused on trading stocks and leveraged funds. Until a reversal occurs in these flows, declaring that the bottom has been reached is, in my view, premature.
My professional advice: 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 Bitcoin moving into the $50,000 zone before the situation improves. This would not be a crash, but rather the formation of a stronger foundation for the next upward move.