Wintermute Analysis: Bitcoin Risks Falling to $50,000 Despite Rebound
Market maker Wintermute warns: the current Bitcoin bounce from the $60,000 zone is not a signal that a bottom has been reached. In the long term, the risk/reward ratio near $60,000 looks attractive, but this does not guarantee that the worst is over. In my assessment, the market could still test the $50,000 level.
Last week, BTC broke a four-week losing streak, bouncing from the $60,000 zone back 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 factor is the May US inflation data. The annual CPI came in at 4.2%, marking the highest since April 2023 and the third consecutive acceleration, but it matched expectations. This was key: debt market participants feared a higher reading, which did not materialize. Core inflation meanwhile slowed to 2.9%, which, in my observation, indicates the peak of the energy impulse has passed rather than further acceleration.
The second and more important factor is the resolution of the US-Iran conflict. After more than 100 days of confrontation, the parties announced a deal: 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 above $80 over the past month, losing 6.6% for the week.
The decline 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 end of the conflict this week reinforced each other rather than canceling out. I see the first Fed meeting under Kevin Warsh on June 17 as the nearest catalyst.
Why the bottom has not yet been reached
The main question, in my opinion, 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 public companies holding cryptocurrencies (DAT). None of them 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 nearly stopped. ETFs are experiencing their longest streak of outflows since launch, and inflows into stablecoins are following the same downward trajectory.
It is important to recall how the last cycle began: real growth started with the ETF approval in early 2024 and the capital inflows it brought. Now, institutional participants remain on the sidelines, while retail investors are busy trading stocks and leveraged funds. Until a reversal occurs, declaring a bottom, in my view, is premature.
My 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 holder base. Nevertheless, I do not rule out Bitcoin moving into the $50,000 zone before the situation improves.
Expert opinion from Cryptalist: The market is in a "wait-and-see" phase, and the key signal for a reversal will be the resumption of inflows into ETFs and stablecoins. Until this happens, any bounce is merely an opportunity to take profits, not the start of a new bull trend. Investors should be prepared for volatility near $50,000.