BIT Research says the crypto market is now in an adjustment phase driven by two forces: changing policy expectations and a clear shift in liquidity conditions. Easing geopolitical tensions and SpaceX’s stronger-than-expected IPO performance had previously helped Bitcoin rebound from technically oversold levels. That rebound lost support after new Federal Reserve Chair Kevin Warsh unexpectedly delivered a hawkish signal, reducing the market’s earlier expectation of a looser policy stance.
At the same time, stablecoin liquidity continues to contract and new capital entering the market remains limited. Trading activity has returned to the thinner conditions often seen during the summer period. From the current pricing structure, BIT Research argues that the market still lacks a macro catalyst strong enough to start a new upward leg.
Hawkish Fed Signals Remove a Key Policy Anchor
Daily trading volume has dropped sharply compared with the peak levels seen in 2025, while stablecoin growth rates have continued to slow. The support once provided by Strategy, formerly MicroStrategy, through purchases of Bitcoin funded by STRC preferred-share issuance is also fading. Under the combined pressure of policy uncertainty, seasonal weakness and shrinking liquidity, Bitcoin’s short-term trend remains under pressure.
The market had broadly expected Kevin Warsh to send a dovish message, but the FOMC instead shifted in a hawkish direction. Several officials indicated that if inflation pressure persists, there is still room for additional rate hikes this year. Warsh also made clear his determination to rebuild policy credibility. He declined to disclose his personal interest-rate dot-plot projection, leaving the market without a clear policy anchor and pushing risk premiums higher. BIT Research notes that, based on historical experience, this type of uncertainty is generally unfavorable for a sustained Bitcoin rebound.
Key Bitcoin Levels: 73,700 Dollars and 62,446 Dollars
The firm’s trend model shows that as long as Bitcoin remains below 73,700 dollars, the overall trend remains bearish. The key resistance level is also expected to move lower over time. From a technical perspective, 62,446 dollars remains an important support level. If Bitcoin breaks below that level, the downside trend could accelerate further.
BIT Research also compares the current setup with the bottoming process seen in 2022. In that case, the market went through an extended period of range-bound consolidation before gradually forming a cyclical low. The current decline does not necessarily point to an immediate recovery, but the report frames the ongoing adjustment as part of a broader clearing process.
Liquidity Shortage Becomes the Central Constraint
Beyond macro policy factors, insufficient liquidity has become the central constraint for the market. Daily trading volume has at times fallen to around 50 billion dollars. During the rally from July to October 2025, average daily trading volume was about 200 billion dollars. Current activity is therefore only about 25% of the previous peak level. With a smaller liquidity base, the market has less capacity to absorb selling pressure or sustain an advance without fresh inflows.
Stablecoin growth has also slowed sharply. The 12-month rolling growth rates of USDT and USDC reached 52% and 122%, respectively, near the end of 2025. Both have now fallen back to around 20% year over year, while the 6-month growth rates are closer to zero. BIT Research says this reflects a clear weakening in new liquidity entering the crypto market.
Capital inflows from Bitcoin ETFs and Strategy have also weakened compared with earlier periods. Strategy previously issued STRC preferred shares aggressively, and those purchases helped push Bitcoin up by around 15,000 dollars, a gain close to 20%. That support effect is now gradually fading. The market’s 30-day rolling fund flow remains in net outflow territory, and without a new strong catalyst, BIT Research argues that a sustainable upward trend remains difficult to form.
Overall, the report points out that 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 enough support to hold firmly above 60,000 dollars in the short term. As the market gradually completes its clearing process, this correction may still form a cyclical low during the summer. The report does not describe a rapid restart of a new rally, but says the process may be preparing the ground for the next bull-market cycle. Some of the above views come from BIT on Target, and the full BIT on Target report is available by contact request.