Analytical Review: Bitcoin risks dropping to the $50,000 zone despite rebound — expert opinion
Bitcoin's recent bounce from the $60,000 mark back to $65,000 has sparked hopes of a trend reversal. However, in my assessment, this optimism is premature. An analysis of the current macroeconomic environment and liquidity structure suggests that the bottom could be significantly deeper—in the $50,000 range.
Two factors that supported the market
BTC's rise last week was driven by two events that coincided in timing and moved in the same direction. The first was US inflation data. The Consumer Price Index (CPI) in May reached 4.2% year-over-year, the highest since April 2023, but it matched market expectations. The key point was that market participants had priced in higher values, while the reality turned out to be softer. Additionally, core inflation slowed to 2.9%, signaling that the peak of the energy impulse has passed.
The second, and more significant factor, was the de-escalation of the geopolitical conflict between the US and Iran. The parties reached an agreement to open the Strait of Hormuz and lift the naval blockade. The formal signing is expected on June 19 in Switzerland. This led to a sharp drop in Brent oil prices—from $110 to above $80 over the past month, with oil losing 6.6% in a single week. The reduction in the geopolitical premium pulled down the dollar and government bond yields, directly improving inflation forecasts and creating a favorable backdrop for risk assets.
Why the bottom hasn't been reached yet
Despite the positive backdrop, I believe it is premature to call the current levels a bottom. The main question 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).
At this point, none of these channels show a reversal. Assets under management of DAT companies have shrunk from approximately $220 billion to $140 billion, and capital raising by new players, aside from Strategy, Bitmine, and Strive, has virtually ceased. Exchange-traded funds are experiencing their longest streak of outflows since launch, while inflows into stablecoins are on a downward trajectory.
Institutional investors remain on the sidelines, and retail traders are focused on trading stocks and leveraged funds. Until there is a reversal in these capital flows, any rally will only be a correction within the downtrend.
My verdict
The risk-reward ratio in the low $60,000s looks attractive in the long term, and each sell-off leaves a more resilient base of holders. However, I do not rule out that Bitcoin could drop into the $50,000 zone before the situation improves. Watch the capital flows, not the news headlines—that is the only reliable indicator of the true bottom.