BIT Research said the crypto market is now in an adjustment phase shaped jointly by policy expectations and liquidity conditions. A period of geopolitical easing and a stronger-than-expected SpaceX IPO performance had helped Bitcoin rebound from technically oversold levels. That rebound lost part of its support after new Federal Reserve Chair Kevin Warsh unexpectedly delivered hawkish signals, weakening the easing expectations that traders had been relying on. At the same time, stablecoin liquidity continues to contract, new capital remains insufficient, and trading activity has returned to the quieter summer pattern described in the report.
Hawkish Fed signals reduce support for the easing trade
Based on current pricing, BIT Research said the market still lacks a macro catalyst strong enough to drive a new upward phase. Daily trading volume has shrunk sharply compared with the 2025 peak, stablecoin growth continues to slow, and the support created by Strategy, formerly MicroStrategy, through STRC preferred-share financing to purchase Bitcoin is gradually fading. With policy uncertainty, weaker seasonal conditions and shrinking liquidity acting at the same time, Bitcoin remains under short-term pressure.
The market had broadly expected Kevin Warsh to deliver a dovish message, but the FOMC instead shifted in a hawkish direction. Several officials indicated that if inflation pressure persists, further rate hikes this year remain part of the policy path, while Warsh also made clear his determination to rebuild policy credibility. Warsh declined to reveal his personal dot-plot projection, leaving the market without a clear policy anchor and pushing risk premiums higher. BIT Research noted that, based on historical experience, this kind of uncertainty is not favorable for a sustained Bitcoin rebound.
Bitcoin remains below the trend threshold watched by the report
The trend model cited by BIT Research shows that as long as Bitcoin remains below 73,700 dollars, the broader trend stays bearish, while the key resistance level will gradually move lower over time. From a technical perspective, 62,446 dollars remains an important support level. If that level is broken, the downward trend would accelerate further, according to the report. BIT Research compared the current structure with the bottoming process seen in 2022, saying the market could enter a longer period of choppy consolidation while gradually building a cycle low.
Stablecoin growth slows and rolling fund flows remain negative
Beyond the macro backdrop, insufficient liquidity has become a central constraint for the market. Daily trading volume has at times fallen to around 50 billion dollars. During the July to October 2025 rally, average daily trading volume was about 200 billion dollars, meaning the current level is only about 25 percent of the earlier peak. Stablecoin growth has also slowed markedly. The 12-month rolling growth rates of USDT and USDC reached 52 percent and 122 percent respectively at the end of 2025, but their current year-on-year growth rates have both fallen to about 20 percent, while six-month growth is closer to zero. BIT Research said this reflects a clear weakening of new liquidity entering the market.
Inflows from Bitcoin ETFs and Strategy have also weakened from previous levels. Strategy previously used aggressive STRC preferred-share issuance to buy Bitcoin, at one point helping Bitcoin rise by around 15,000 dollars, or nearly 20 percent. That support effect is now 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 establish.
BIT Research also pointed to inflation at 4.2 percent, well above the Federal Reserve’s 2.0 percent target. Under the combined influence of a hawkish policy stance, weaker summer seasonality and insufficient liquidity, the report said Bitcoin still lacks enough support to hold above 60,000 dollars in the short term. As the market gradually completes its clearing process, the current correction is still framed as one that could build a cycle low this summer. The price does not necessarily need to start a new rally quickly, but this process is being described as preparation for the next bull-market cycle. Part of the above view comes from BIT on Target, and the complete BIT on Target report is available by contacting the team.
