BIT Research said the current crypto market is in an adjustment phase shaped by policy expectations and changes in liquidity. Easing geopolitical tensions and a stronger-than-expected SpaceX IPO had helped Bitcoin rebound from technically oversold levels, but an unexpected hawkish signal from new Federal Reserve Chair Kevin Warsh removed the easing expectations that had previously supported sentiment. At the same time, stablecoin liquidity continues to contract, fresh capital remains insufficient, and trading activity has returned to the typically lighter summer pattern.
Hawkish Fed signals weaken the policy backdrop
From the perspective of current pricing, the market still lacks a macro catalyst strong enough to drive a new upward leg. Daily trading volume has shrunk significantly from its 2025 peak, stablecoin growth rates continue to slow, and the support created by Strategy, formerly MicroStrategy, buying Bitcoin through STRC preferred stock financing is gradually fading. Under the combined influence of policy uncertainty, weaker seasonal trading, and tighter liquidity, Bitcoin’s short-term trend remains under pressure.
The market had broadly expected Kevin Warsh to deliver a dovish signal, but the FOMC unexpectedly turned hawkish. Several committee members indicated that if inflation pressure persists, further rate hikes this year remain possible, while Warsh also clearly expressed his determination to rebuild policy credibility. BIT Research noted that Warsh refused to disclose his personal rate dot-plot projection, leaving the market without a clear policy anchor and raising the risk premium. Based on historical experience, this type of uncertainty is unfavorable for a sustained Bitcoin rebound.
Bitcoin remains below key trend resistance
The trend model shows that as long as Bitcoin remains below $73,700, the overall trend stays bearish, and the key resistance level will continue to move lower over time. On the technical side, $62,446 remains an important support level. If that area is broken, the downtrend could accelerate further. The report also compares the current setup with the bottoming process in 2022, noting that the market may go through a longer period of range-bound consolidation before gradually completing a cyclical low.
Liquidity constraints become the core pressure point
Beyond macro factors, insufficient liquidity is becoming the central constraint for the market. Daily trading volume has at times fallen to around $50 billion, compared with an average daily volume of roughly $200 billion during the rally from July to October 2025. The current level is only about 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, but their year-on-year growth rates have now both fallen back to around 20%. Their six-month growth rates are closer to zero, showing a clear weakening of new liquidity.
Capital inflows from Bitcoin ETFs and Strategy have also weakened compared with earlier stages. Strategy’s aggressive issuance of STRC preferred stock had previously helped push Bitcoin up by about $15,000, a gain of close to 20%, but that support is now fading. The market’s 30-day rolling fund flow remains in net outflow territory. Without a new and strong catalyst, a sustainable upward trend remains difficult to form.
Overall, the 4.2% inflation level is 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 stay firmly above $60,000 in the short term. BIT Research said that as the market gradually completes its clearing process, the current adjustment still has the possibility of forming a cyclical low this summer. Prices may not quickly begin a new rally, but this process is preparing conditions for the next bull-market cycle. Some of the above views come from BIT on Target, and readers can contact the team to obtain the full BIT on Target report.
