Bitcoin is preparing to test $50,000: Wintermute analysis points to an unfinished bottom
Despite a recent bounce from the $60,000 zone and a return above $65,000, analysts at leading market maker Wintermute warn that the bottom for Bitcoin (BTC) has not yet been reached. In their latest market review, the company's strategists point to a high probability of a renewed decline toward levels near $50,000. Short-term positivity does not negate the structural problems that continue to weigh on the leading cryptocurrency.
What triggered the bounce?
The market reacted with growth to two events that, for the first time in a long while, aligned in direction. First, May US inflation data — the Consumer Price Index (CPI) came in at 4.2% year-over-year, matching expectations. Debt market participants had feared a higher reading, and core inflation slowed to 2.9%. This signals that the energy impulse that had been pushing prices up has peaked and is not accelerating further.
Second, and in my view more significant, is the resolution of the prolonged conflict between the US and Iran. The parties agreed to open the Strait of Hormuz and lift the naval blockade. The formal signing of the agreement is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude oil has plummeted from $110 to levels above $80 over the past month, losing 6.6% in the last week alone.
The reduction in the geopolitical premium has pulled down the dollar and government bond yields, while cheaper oil directly improves the inflation outlook. These factors reinforced each other rather than canceling out. The nearest catalyst for the market will be the first Federal Reserve meeting under Kevin Warsh's leadership on June 17.
Why is the bottom still ahead?
The key question, according to analysts, 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 cryptocurrency (DAT). None of these channels have shown a reversal yet.
Assets under management of DAT companies have fallen from approximately $220 billion to $140 billion, and new capital raising beyond 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.
How did the last cycle begin? With the approval of ETFs in early 2024 and the capital inflows that approval brought. Now, institutions remain on the sidelines, while retail investors are busy trading stocks and leveraged funds. Until a reversal occurs in these flows, declaring a bottom is premature.
My analysis: The attractive risk-reward ratio in the low $60,000 range does not negate the fact that each selloff leaves a more resilient base of holders. However, a full reversal requires a catalyst — either a shift in Fed rhetoric or a resumption of ETF inflows. Until that happens, the scenario of Bitcoin moving into the $50,000 zone remains the baseline.