BIT Research argues that the crypto market is now moving through a correction shaped by two main forces: changing policy expectations and deteriorating liquidity. Easing geopolitical tensions and the stronger-than-expected performance of the SpaceX IPO once helped Bitcoin rebound from technically oversold levels. That rebound lost support after newly appointed Federal Reserve Chair Kevin Warsh unexpectedly delivered a hawkish signal, weakening the market’s earlier expectation of easier policy conditions.
At the same time, stablecoin liquidity continues to contract and new capital entering the market has become noticeably insufficient. BIT Research describes the current environment as a return to the typically thin summer trading phase. From a pricing perspective, the market still lacks a macro catalyst strong enough to drive another sustained rally. Daily trading volume has fallen sharply from its 2025 peak, stablecoin growth is slowing, and the support from Strategy, formerly MicroStrategy, buying Bitcoin through STRC preferred-share financing is fading.
Hawkish Fed Signals Remove a Clear Policy Anchor
The report notes that the market had broadly expected Kevin Warsh to issue dovish signals, but the FOMC instead made an unexpected hawkish turn. Several committee members indicated that if inflation pressure continues, there is a scenario in which further rate hikes could occur this year. Warsh also clearly stated his determination to rebuild policy credibility.
BIT Research’s trend model shows that as long as Bitcoin remains below $73,700, the broader trend stays bearish, while the key resistance level will gradually move lower over time. Warsh’s refusal to disclose his own rate dot-plot projection also removed a clear policy anchor from the market, pushing risk premiums higher. Based on historical experience cited in the report, this type of uncertainty is unfavorable for a sustained Bitcoin rebound.
$62,446 Support and the 2022 Bottoming Comparison
From a technical perspective, $62,446 remains an important support level. If Bitcoin falls below that level, the downtrend faces the risk of accelerating further. BIT Research compares the current setup with the bottoming process seen in 2022, when the market went through an extended period of range-bound consolidation before gradually forming a cyclical low. The report does not frame this process as an immediate start to a new rally; instead, it emphasizes the role of adjustment and market clearing.
Stablecoin Growth and Trading Volume Continue to Weaken
Beyond macro conditions, insufficient liquidity has become the key constraint facing the market. Daily trading volume has at times shrunk to around $50 billion. During the July-to-October rally phase in 2025, average daily trading volume was about $200 billion, meaning the current level is only around 25% of the previous peak. Stablecoin growth has also slowed significantly. The 12-month rolling growth rates of USDT and USDC reached 52% and 122%, respectively, at the end of 2025, but both year-on-year growth rates have now fallen back to around 20%. Their six-month growth rates are closer to zero, reflecting a clear weakening in new liquidity.
Inflows from Bitcoin ETFs and Strategy have also weakened compared with earlier periods. Strategy’s aggressive issuance of STRC preferred shares previously helped push Bitcoin up by around $15,000, a gain close to 20%, but that support effect is now gradually fading. The market’s 30-day rolling capital flow remains in net outflow territory, and BIT Research states that a durable upward trend is still difficult to form before a new strong catalyst appears.
Overall, inflation at 4.2% remains far above the Federal Reserve’s 2.0% target. Under the combined influence of a hawkish policy stance, weaker summer seasonality and insufficient liquidity, Bitcoin still lacks adequate support to remain firmly above $60,000 in the short term. However, as the market continues to complete its clearing process, this correction still has conditions to form a cyclical low this summer. Some of the above views come from BIT on Target; readers may contact BIT on Target to obtain the full report.