Analysts warn: Bitcoin may test the $50,000 zone — the bottom has not yet been reached
Despite the recent bounce of the first cryptocurrency from the $60,000 area, it is still premature to call this the cycle bottom. Based on my analysis of market flows, Bitcoin (BTC) retains the potential for a decline down to levels near $50,000. An attractive risk-reward ratio in the long term does not negate the high probability of further drawdown.
What triggered the bounce?
Last week, BTC broke its prolonged four-week losing streak, bouncing from the $60,000 zone back above $65,000. Two key factors worked in unison, which happens rarely.
The first is the May US inflation data. The annual Consumer Price Index (CPI) came in at 4.2%, matching market expectations but marking the highest since April 2023. The key point: debt market participants feared a higher reading, and the alignment with forecasts eased some tension. Core inflation meanwhile slowed to 2.9%, indicating the peak of the energy impulse has passed rather than accelerating further.
The second and more significant factor is the de-escalation of the conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal, including 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 collapsed from $110 to levels above $80 over the month, losing 6.6% in the last week alone.
The reduction in the geopolitical premium pulled down the dollar and government bond yields. Cheaper oil directly improves the inflation outlook, so the CPI data and the end of the conflict this week mutually reinforced each other's effect rather than canceling each other out. I see the first Fed meeting under Kevin Warsh on June 17 as the nearest catalyst.
Why the bottom has not been reached yet
The main question now is when the market will turn, and the answer lies in liquidity. BTC remains a macro asset that grows on excess liquidity flowing through three channels: stablecoins, exchange-traded funds (ETFs), and public companies holding crypto (DAT). None of them show a reversal yet.
Assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion. Beyond Strategy, Bitmine, and Strive, new capital raising has virtually stopped. Exchange-traded funds are experiencing their longest streak of outflows since launch. Inflows into stablecoins are following the same downward trajectory.
Recall how the last cycle began: real growth started with the approval of ETFs in early 2024 and the subsequent capital inflow. Currently, institutions remain on the sidelines, while retail investors are busy trading stocks and leveraged funds. Until a reversal occurs, declaring the bottom is premature.
My 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 holder base. Nevertheless, I do not rule out that BTC could move into the $50,000 zone before the situation improves.
Expert opinion from Cryptalist: The market is in a consolidation phase, shaking out weak hands. Fundamental drivers for a new rally have not yet formed, and the macroeconomic backdrop remains uncertain. Investors with a 6-month horizon should look at levels below $55,000, but without haste — a buy signal will only appear when capital inflows into ETFs and stablecoins resume.