BIT Research said the crypto market is now in a correction phase shaped by both policy expectations and liquidity conditions. A period of easing geopolitical tension, together with SpaceX IPO performance that exceeded expectations, had helped Bitcoin rebound from a technically oversold level. That recovery lost part of its support after new Federal Reserve Chair Kevin Warsh unexpectedly delivered a hawkish signal, weakening the easing expectations that investors had previously priced in.
The report said the market still lacks a macro catalyst strong enough to drive a new upward leg. Daily trading volume has contracted sharply compared with the 2025 peak, stablecoin growth continues to slow, and the support that came from Strategy, formerly MicroStrategy, buying Bitcoin through STRC preferred-stock financing is gradually fading. Under the combined pressure of policy uncertainty, weak summer seasonality and shrinking liquidity, Bitcoin’s near-term trend remains under pressure.
Hawkish policy signals replace expected dovish guidance
Before the latest shift, the market had broadly expected Kevin Warsh to deliver a dovish message. Instead, the FOMC turned more hawkish than expected. Several officials indicated that if inflation pressure persists, further rate hikes this year remain within the policy discussion, while Warsh clearly stated his determination to rebuild policy credibility.
BIT Research said its trend model remains bearish as long as Bitcoin stays below $73,700. The key resistance level is also expected by the model to move lower over time. Warsh’s refusal to disclose his personal rate dot-plot projection removed a clear policy anchor from the market, raising the risk premium. Based on historical experience cited in the report, this type of uncertainty is generally unfavorable for a sustained Bitcoin rebound.
Liquidity is becoming the main constraint
From a technical perspective, $62,446 remains an important support level. A break below that price would increase the risk of a faster downward move. At the same time, the report compares the current setup with Bitcoin’s 2022 bottoming process, in which the market went through an extended period of range-bound consolidation before completing a cyclical low.
Beyond macro policy, insufficient liquidity is becoming a central constraint for the market. Daily trading volume has at times fallen to about $50 billion. During the July-to-October rally in 2025, average daily trading volume was about $200 billion, meaning current activity 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, in late 2025. Those year-on-year growth rates have now fallen to around 20%, while the six-month growth rate is closer to zero. According to the report, this reflects a clear weakening in new liquidity entering the market.
ETF and Strategy inflows are no longer providing the same lift
The inflows associated with Bitcoin ETFs and Strategy have also weakened from earlier levels. Strategy previously used aggressive STRC preferred-stock issuance to finance Bitcoin purchases, helping drive Bitcoin up by roughly $15,000, or nearly 20%. That support effect is now gradually wearing off. The market’s 30-day rolling fund flow remains in net outflow, and without a new strong catalyst, the report says a sustainable upward trend remains difficult to form.
Overall, inflation at 4.2% remains far above the Federal Reserve’s 2.0% target. With a hawkish policy stance, weaker summer seasonality and insufficient liquidity acting together, Bitcoin still lacks adequate support to remain firmly above $60,000 in the short term. BIT Research said that as the market gradually completes its clearing process, this correction still has room to form a cyclical low this summer. Prices may not start a new upward cycle quickly, but the process is being framed as preparation for the next bull-market cycle. Part of the above view comes from BIT on Target, and the full BIT on Target report is available by contact request.