BIT Research says the current crypto market is moving through a correction phase shaped by two forces: shifting policy expectations and changing liquidity conditions. A period of easing geopolitical tensions, together with SpaceX IPO performance that exceeded expectations, had helped Bitcoin rebound from technically oversold levels. That recovery lost part of its support after new Federal Reserve Chair Kevin Warsh unexpectedly delivered a hawkish signal, removing the easing narrative that traders had previously expected.
Hawkish Fed Signals Replace Easing Expectations
According to the report, the market still lacks a macro catalyst strong enough to drive a new upward leg. Daily trading volume has contracted sharply compared with the peak levels seen in 2025, stablecoin growth has continued to slow, and the support from Strategy, formerly MicroStrategy, has weakened as well. Strategy had bought Bitcoin using financing from STRC preferred shares, but BIT Research says that effect is fading. Under the combined pressure of policy uncertainty, weaker summer seasonality and shrinking liquidity, Bitcoin remains under short-term pressure.
The market had broadly expected Kevin Warsh to issue a dovish signal after taking the Fed chair role, but the FOMC shifted in a hawkish direction instead. Several committee members indicated that if inflation pressure persists, there is still room for further rate increases this year. Warsh also made clear his determination to rebuild policy credibility. At the same time, he declined to disclose his personal rate dot-plot forecast, leaving the market without a clear policy anchor and lifting the risk premium. BIT Research notes that this type of uncertainty has historically worked against a sustained Bitcoin rebound.
Key Levels: $73,700 Resistance and $62,446 Support
The trend model cited in the report shows that as long as Bitcoin remains below $73,700, the broader trend stays bearish. The key resistance level is also expected within the model framework to move lower over time. On the technical side, $62,446 remains an important support level. If Bitcoin breaks below that point, the downside trend could accelerate further. The report also compares the current environment with the 2022 bottoming process, in which the market spent an extended period moving sideways before gradually forming a cyclical low.
Stablecoin Growth and ETF Flows Continue to Weaken
Beyond macro policy, insufficient liquidity has become a core constraint for the market. Daily trading volume has at times fallen to around $50 billion. During the rally from July to October 2025, average daily trading volume was about $200 billion, meaning current activity is only around 25% of that earlier peak. Stablecoin growth has also slowed meaningfully. The 12-month rolling growth rates for USDT and USDC reached 52% and 122%, respectively, near the end of 2025. Both year-on-year growth rates have now fallen to about 20%, while six-month growth is closer to zero, showing that new liquidity entering the market has weakened considerably.
Bitcoin ETF inflows and Strategy-related flows have also declined from previous levels. Strategy’s aggressive issuance of STRC preferred shares once helped push Bitcoin up by about $15,000, close to a 20% gain. BIT Research says that support is now gradually fading. The market’s 30-day rolling fund flow remains in net outflow territory, and without a new strong catalyst, a sustained upward trend remains difficult to form.
The report concludes 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 remain firmly above $60,000 in the short term. At the same time, as the market gradually completes its clearing process, this correction still has room to form a cyclical low during the summer. The price does not need to begin a new rally immediately, but the report says the process may be preparing the ground for the next bull-market cycle. The views above are partly from BIT on Target, and the full BIT on Target report is available by contacting the provider.
