BIT Research said the crypto market is now in an adjustment phase shaped jointly by policy expectations and changes in liquidity. Earlier, easing geopolitical tensions and the stronger-than-expected performance of the SpaceX IPO helped Bitcoin rebound from technically oversold levels. That support weakened after incoming Federal Reserve Chair Kevin Warsh unexpectedly sent a hawkish signal, removing the easing expectations that the market had been relying on. At the same time, stablecoin liquidity has continued to contract, new capital inflows remain insufficient, and trading activity has returned to the thin summer conditions often seen in the market.
Hawkish policy signals weaken the easing narrative
Based on current pricing, BIT Research said the market still lacks the macro catalyst needed to drive a new upward leg. Daily trading volume has shrunk significantly compared with the 2025 peak. Stablecoin growth has continued to slow, while the support created by Strategy, formerly MicroStrategy, through Bitcoin purchases funded by STRC preferred stock issuance is also fading. Under the combined pressure of policy uncertainty, weak seasonality and shrinking liquidity, Bitcoin’s short-term path remains under pressure.
The market had broadly expected Kevin Warsh to deliver a dovish message after taking the Fed leadership role, but the FOMC instead shifted in a hawkish direction. Several committee members indicated that if inflation pressure persists, additional rate hikes this year would still be on the table. Warsh also clearly stated his determination to rebuild policy credibility. In addition, his refusal to disclose his personal rate dot-plot projection deprived the market of a clear policy anchor, pushing risk premiums higher. BIT Research noted that, based on historical experience, this type of uncertainty is generally unfavorable for a sustained Bitcoin rebound.
Bitcoin remains below $73,700 as $62,446 support comes into focus
According to the trend model cited by BIT Research, as long as Bitcoin remains below $73,700, the overall trend stays bearish, while key resistance levels will gradually move lower over time. From a technical perspective, $62,446 remains an important support level. If that level breaks, the downside trend could accelerate further. BIT Research also compared the current phase with the bottoming process seen in 2022, when the market needed a longer period of range-bound consolidation before completing a cycle low rather than immediately returning to a one-way uptrend.
Stablecoin growth and capital inflows both cool
Beyond macro factors, insufficient liquidity has become the main constraint facing the current market. Daily trading volume has at times contracted to about $50 billion. During the July-to-October 2025 rally phase, average daily volume was about $200 billion, meaning current activity is only around 25% of that earlier peak. Stablecoin growth has also slowed sharply. The 12-month rolling growth rates of USDT and USDC once reached 52% and 122%, respectively, at the end of 2025. Both year-on-year growth rates have now fallen back to around 20%, while the six-month growth rate is closer to zero, reflecting a clear weakening in new liquidity.
Inflows from Bitcoin ETFs and Strategy have also weakened compared with earlier levels. Strategy’s aggressive issuance of STRC preferred stock previously helped push Bitcoin higher by about $15,000, a move of nearly 20%, but that support is gradually disappearing. The market’s 30-day rolling capital flow is still in net outflow territory. Without a new and strong catalyst, BIT Research said it remains difficult for a durable upward trend to form.
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 enough support to hold firmly above $60,000 in the short term. BIT Research said that as the market gradually completes its clearing process, this adjustment still has room to form a cycle low this summer. Prices may not quickly begin a new rally, but the process is preparing conditions for the next bull-market cycle. The above views are partly from BIT on Target, and the full BIT on Target report is available by contact request.
