Wintermute analysts warn: Bitcoin may test the $50,000 zone
Despite the recent rebound of the first cryptocurrency from the psychological level of $60,000, I believe it is too early for the market to relax. Leading market maker Wintermute allows for a scenario of a repeated decline in Bitcoin (BTC) down to levels near $50,000. Yes, an attractive risk-reward ratio is indeed observed in the long term, but this does not mean that the bottom has already been passed.
What triggered the rebound?
Last week, BTC broke its prolonged four-week losing streak, rebounding from the $60,000 zone back above $65,000. As I see it, this was facilitated by two key factors that, for the first time in a long while, worked in unison.
First, the May US inflation data. The annual Consumer Price Index (CPI) stood at 4.2% — the highest since April 2023 and the third consecutive acceleration. However, the figure matched expectations. This was precisely the trigger: market participants had priced in a higher value, but reality turned out to be "softer." Core inflation, meanwhile, slowed to 2.9%, signaling that the peak of the energy impulse has passed, rather than further acceleration.
Second, and in my view, an even more significant factor — the de-escalation of the geopolitical conflict between the US and Iran. The parties announced a deal, agreeing to open the Strait of Hormuz and lift the naval blockade. The formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil plummeted from $110 to levels above $80 over the past month, losing 6.6% in just one week.
The reduction in the geopolitical risk premium pulled down the dollar and government bond yields. Cheaper oil directly improves inflation forecasts, so the CPI data and the cessation of the conflict this week only reinforced each other, rather than canceling out. I see the first Federal Reserve meeting under Kevin Warsh's leadership on June 17 as the nearest catalyst.
Why hasn't the bottom been reached yet?
The main question now is when the market will turn around, and the answer, in my firm belief, lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity coming through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding cryptocurrencies (DAT). And none of them show signs of a reversal yet.
Assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion, and the attraction of new capital outside of Strategy, Bitmine, and Strive has virtually ceased. 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 reminds us, real growth began with the approval of ETFs in early 2024 and the subsequent influx of capital. Currently, institutions remain on the sidelines, while retail investors are focused on trading stocks and leveraged funds. Until a reversal in capital flows occurs, declaring that the bottom has been reached is, in my opinion, premature.
My main advice as an analyst: watch capital flows, not price or news headlines. The risk-reward ratio in the low $60,000 range looks attractive in the long term, and each sell-off leaves an increasingly resilient base of holders. Nevertheless, I do not rule out that Bitcoin could move into the $50,000 zone before the situation improves. The market has not yet undergone a full cleansing.
My professional opinion: The scenario of a drop to $50,000 is not panic-mongering, but a rational assessment of the current macroeconomic and structural situation. Until we see a sustained resumption of inflows into ETFs and stablecoins, every local rebound will be merely a pause before another test of support levels. Investors with a horizon of 6 months or more should use potential drawdowns for accumulation, but opening long positions "with all your chips" right now is a high-risk game.