Bitcoin on the verge of $50,000? Analysts warn: the bottom has not yet been reached
Despite a recent bounce from the $60,000 zone and a return above $65,000, leading market analysts warn that the current rally is not yet a trend reversal. According to a fresh assessment, the risk-reward ratio near $60,000 looks attractive only in the long term, but this does not guarantee that we have already seen the bottom. The realistic scenario suggests the first cryptocurrency could fall to levels around $50,000.
Last week, Bitcoin broke a four-week losing streak, bouncing from the $60,000 level back to above $65,000. This momentum was supported by two factors that, for the first time in a long while, worked in unison.
What Triggered the Bounce
The first and key factor was the May US inflation data. The annual Consumer Price Index (CPI) came in at 4.2%, the highest reading since April 2023. However, the most important aspect was that the figure matched market expectations. Debt market participants had feared a higher value, and its confirmation eased some of the tension. Meanwhile, core inflation slowed to 2.9%, indicating that the peak of the energy impulse has passed rather than accelerating further.
The second and more significant catalyst was the resolution of the geopolitical conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal, agreeing to reopen the Strait of Hormuz and lift the naval blockade. The official signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil 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 dragged down the dollar and government bond yields. Cheaper oil directly improves the inflation outlook, so the CPI data and the end of the conflict did not cancel each other out this week but rather amplified one another. The next near-term catalyst will be the first Federal Reserve meeting under Kevin Warsh's leadership on June 17.
Why the Bottom Has Not Yet Been Reached
The main question, according to experts, is when the market will turn, 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). And none of these channels are turning around yet.
Assets under management of DAT companies have fallen from roughly $220 billion to $140 billion, and outside of Strategy, Bitmine, and Strive, new capital raising 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 analysts remind us, the previous cycle began with the approval of ETFs in early 2024 and the capital inflows that approval brought. Now, institutional participants remain on the sidelines, while retail investors are busy trading stocks and leveraged funds. Until a reversal occurs in these flows, it is premature to declare that a bottom has been reached.
The 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.
My expert opinion: The market is in a "shakeout of weak hands" phase, and a drop to $50,000 would be a classic false breakdown, creating an ideal entry point for long-term investors. However, patience here is the key asset.