The current market is undergoing an adjustment phase dominated by policy expectations and changes in liquidity. The easing of geopolitical tensions and the better-than-expected performance of the SpaceX IPO temporarily drove Bitcoin to rebound from a technically oversold level, but the new Federal Reserve Chairman Kevin Warsh unexpectedly released hawkish signals, causing the market to lose the expected support for easing. Meanwhile, the liquidity of stablecoins continues to contract, with new funds significantly insufficient, leading the market to re-enter a typical summer phase of light trading.
From the current pricing perspective, the market still lacks macro catalysts strong enough to drive a new round of increases. Daily trading volume has noticeably shrunk compared to the peak period in 2025, the growth rate of stablecoins continues to slow down, and the supporting effect brought by Strategy (formerly MicroStrategy) buying Bitcoin through STRC preferred stock financing is also gradually weakening. Under the combined effects of policy uncertainty, seasonal weakness, and liquidity contraction, Bitcoin's short-term trend remains under pressure.
Hawkish expectations rise: Policy uncertainty suppresses market risk appetite
The market had generally anticipated that the new Federal Reserve Chairman Kevin Warsh would release dovish signals; however, the FOMC unexpectedly turned hawkish. Several committee members hinted that if inflationary pressures persist, there could be further interest rate hikes this year, and Warsh also clearly expressed his determination to rebuild policy credibility.
Trend models show that as long as Bitcoin remains below $73,700, the overall trend continues to maintain a bearish outlook, with key resistance levels gradually descending over time. At the same time, Warsh declined to disclose personal rate dot plot forecasts, leaving the market without a clear policy anchor, which subsequently raised risk premiums. Historically, such uncertainty has often been unfavorable for Bitcoin's continuous rebound.
From a technical perspective, $62,446 remains an important support level. If this level is breached, the downward trend may accelerate further. However, similar to the bottom-building process in 2022, the market may also experience a long period of oscillation and gradually complete the formation of the cycle bottom.
Liquidity continues to contract: Insufficient new funds limit rebound space
In addition to macro factors, liquidity shortage is becoming a core constraint facing the current market. Daily trading volume has sometimes shrunk to around $50 billion, while the average daily trading volume during the rising phase from July to October 2025 was about $200 billion, only about 25% of the previous peak.
The growth of stablecoins has also sharply slowed. The 12-month rolling growth rate of USDT and USDC reached 52% and 122% respectively at the end of 2025, but the current year-on-year growth rates have both fallen to around 20%, with the 6-month growth rate closer to zero, indicating a significant reduction in new liquidity.
At the same time, the capital inflow from Bitcoin ETFs and Strategy has also diminished significantly compared to before. Previously, Strategy's aggressive issuance of STRC preferred stock had pushed Bitcoin up by about $15,000, a nearly 20% increase, but this supporting effect is gradually fading. Currently, the market's 30-day rolling capital flow remains in a net outflow state, and without strong new catalysts, a sustained upward trend remains difficult to establish.
Overall, the 4.2% inflation level is far above the Federal Reserve's 2.0% target. Under the combined influences of a hawkish stance, seasonal weakness in summer, and insufficient liquidity, Bitcoin's ability to stay above $60,000 in the short term lacks adequate support. However, as the market gradually completes its clearing process, this round of adjustments may still build a cycle bottom this summer. Prices may not quickly initiate a new round of increases, but this process may be preparing for the next bull market cycle.
The above views partly come from BIT on Target, Contact usto obtain the complete BIT on Target report.
Disclaimer: The market carries risks; investments should be made cautiously. This article does not constitute investment advice. Digital asset trading may have significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.
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