Analysts at the market maker Wintermute allow that Bitcoin (BTC) may yet fall to levels near $50,000, despite the recent rebound. According to Wintermute strategist Jasper De Maere, the attractive long-term risk-reward ratio around $60,000 does not mean that the market bottom has already been reached.

Last week Bitcoin broke a four-week losing streak and rebounded from the $60,000 zone back to levels above $65,000. Two factors that for the first time in a long while worked in the same direction provided support.

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What caused the rebound

The first factor — the May inflation data in the US. The annual consumer price index (CPI) came in at 4.2% — the highest since April 2023 and the third consecutive acceleration, but it matched expectations. That, according to Wintermute, was the key point: debt market participants had feared a higher figure, and it did not materialize. Core inflation, meanwhile, slowed to 2.9%, and this, in analysts' assessment, indicates that the energy impulse has passed its peak rather than accelerating further.

The second and more important factor — the end of the conflict between the US and Iran. After more than 100 days of confrontation, the parties announced a deal. They agreed to reopen the Strait of Hormuz and lift the naval blockade. The formal signing is scheduled for June 19 in Switzerland. Against this backdrop, Brent crude crashed from just over $110 to above $80 over the past month, losing 6.6% over the week.

The reduction of the geopolitical risk premium, which had weighed on the market since late February, dragged 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 rather than offset each other. Wintermute names the first Fed meeting under the leadership of Kevin Warsh on June 17 as the nearest catalyst.

Source: BeInCrypto