Analytical review from Cryptalist: Bitcoin risks dropping to the $50,000 zone despite the rebound
The cryptocurrency market is experiencing a moment of uncertainty. Despite Bitcoin (BTC) breaking its prolonged losing streak last week, bouncing from the $60,000 zone back to levels above $65,000, leading analysts warn: this is not the bottom. My analysis confirms that the current rally may only be a temporary respite before a new wave of correction.
Factors Behind the Bounce: Coincidence, Not a Trend
Bitcoin's bounce was triggered by two key events that, for the first time in a long while, worked in sync. First, the May U.S. inflation data. The Consumer Price Index (CPI) came in at 4.2% — the highest since April 2023, but in line with expectations. The bond market had feared a higher reading, and the alignment with forecasts eased some pressure. Meanwhile, core inflation slowed to 2.9%, indicating that the peak of the energy impulse has passed rather than accelerating further.
Second, and in my view more significantly, the de-escalation of the geopolitical conflict between the U.S. and Iran. The parties announced a deal to reopen the Strait of Hormuz and lift the naval blockade, with signing scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil plummeted from $110 to levels above $80 within a month, losing 6.6% in a week. The reduction in the geopolitical premium dragged down the dollar and government bond yields, directly improving inflation expectations. The CPI data and the cessation of the conflict reinforced each other, creating a favorable backdrop for risk assets.
Why the Bottom Has Not Yet Been Reached
The main question now is when the market will turn, and the answer lies in liquidity. Bitcoin remains a macro asset that grows on excess liquidity through three channels: stablecoins, exchange-traded funds (ETFs), and publicly traded companies holding cryptocurrencies (DAT). None of them show a reversal yet.
Assets under management of DAT companies have shrunk from $220 billion to $140 billion, and new capital raising beyond Strategy, Bitmine, and Strive has virtually ceased. ETFs are experiencing their longest streak of outflows since launch, while stablecoin inflows follow the same downward trajectory.
My experience suggests that a repeat of the past cycle is unlikely without a new catalyst. Back then, real growth began with ETF approval in early 2024 and capital inflows. Now, institutional participants remain on the sidelines, and retail investors are focused on trading stocks and leveraged funds. Until a reversal in capital flows occurs, it is premature to declare the bottom.
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 Bitcoin dropping into the $50,000 zone before the situation improves. The key catalyst is the first Federal Reserve meeting under Kevin Warsh's leadership on June 17.
Expert opinion from Cryptalist: The market is in a consolidation phase, and $50,000 is not just a psychological level but a zone where a new base for the next bull cycle will form. Watch capital flows, not price — they will determine the true bottom.