BIT Research said the crypto market is now in a correction phase shaped by both policy expectations and changes in liquidity. Easing geopolitical tensions and the stronger-than-expected performance of the SpaceX IPO had helped Bitcoin rebound from technically oversold levels. That support faded after new Federal Reserve Chair Kevin Warsh unexpectedly delivered a hawkish signal, reducing the market’s earlier expectation of easier policy conditions. At the same time, stablecoin liquidity has continued to contract, fresh capital has become clearly insufficient, and the market has returned to a typically quiet summer trading environment.
Hawkish Fed Signals Remove a Key Policy Anchor
From the current pricing structure, BIT Research said the market still lacks a macro catalyst strong enough to drive a new upward move. Investors had previously expected Kevin Warsh to send a dovish signal, but the FOMC instead turned unexpectedly hawkish. Several committee members indicated that if inflation pressure persists, further rate increases could still be on the table this year. Warsh also clearly expressed his determination to rebuild policy credibility.
The inflation backdrop remains important in the report’s framework. Inflation at 4.2% is far above the Federal Reserve’s 2.0% target, keeping pressure on risk assets. The trend model cited by BIT Research shows that as long as Bitcoin remains below 73,700 dollars, the broader trend remains bearish, while key resistance levels are expected to move lower over time. Warsh’s refusal to disclose his personal interest-rate dot-plot forecast also left the market without a clear policy anchor, raising the risk premium. Based on historical experience, the report said this type of uncertainty is generally unfavorable for a sustained Bitcoin rebound.
The 62,446 Dollar Level and the 2022 Bottoming Template
On the technical side, BIT Research identified 62,446 dollars as an important support level. If Bitcoin falls below that area, the downward trend could accelerate further. The report also compared the current environment with the bottoming process seen in 2022. Under that reference, the market may not reverse quickly; instead, it can spend a longer period moving sideways and gradually forming a cyclical low.
Liquidity is becoming a central constraint alongside macro policy. 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. The current level is therefore only around 25% of the earlier peak. That decline in turnover shows how much weaker trading conditions have become compared with the previous upward phase.
Stablecoin growth has also slowed sharply. The 12-month rolling growth rates of USDT and USDC reached 52% and 122%, respectively, at the end of 2025. Both have now fallen back to around 20% year over year, while six-month growth rates are closer to zero. For BIT Research, this points to a clear weakening in new liquidity entering the market.
ETF and Strategy Inflows No Longer Provide the Same Support
Capital inflows from Bitcoin ETFs and Strategy have also weakened compared with previous periods. Strategy, formerly MicroStrategy, had aggressively issued STRC preferred shares to finance Bitcoin purchases. That activity once helped push Bitcoin up by about 15,000 dollars, a gain close to 20%. However, the report said that support effect is gradually fading. The market’s 30-day rolling capital flow remains in net outflow territory, making it difficult for a durable uptrend to form before a new and powerful catalyst appears.
Overall, BIT Research said Bitcoin still lacks sufficient support to remain firmly above 60,000 dollars in the short term, given the combination of a hawkish policy stance, weaker summer seasonality and insufficient liquidity. As the market gradually completes its clearing process, the current correction still has room to form a cyclical low this summer. The price may not quickly begin a new upward phase, but the process is being viewed as preparation for the next bull-market cycle. Some of the views above come from BIT on Target, and the full BIT on Target report is available by contacting the team.