BIT Research said the crypto market is currently in an adjustment phase shaped by two forces: changing policy expectations and a clear deterioration in liquidity. A period of geopolitical easing and a stronger-than-expected SpaceX IPO had previously helped Bitcoin rebound from technically oversold levels. That rebound, however, lost an important part of its support after new Federal Reserve Chair Kevin Warsh delivered an unexpectedly hawkish signal, reducing the market’s earlier expectation for a more accommodative policy path.
At the same time, the report said stablecoin liquidity has continued to contract, while fresh capital entering the market remains visibly insufficient. Trading conditions have returned to the thin summer pattern often seen in the market. From the current pricing perspective, BIT Research said there is still no macro catalyst strong enough to support a new leg higher in Bitcoin.
Hawkish Fed signals replace expectations for easing
The market had broadly expected Kevin Warsh to send a dovish message after taking the role, according to the report, but the FOMC instead moved in a more hawkish direction. Several committee members indicated that if inflation pressure continues, there is still room for further rate increases this year. Warsh also made clear his intention to rebuild policy credibility.
The report noted that Warsh declined to disclose his personal interest-rate dot-plot projection. As a result, the market lost a clear policy anchor, and the risk premium rose accordingly. In historical experience, this type of policy uncertainty has generally not been favorable for a sustained Bitcoin rebound. The macro backdrop is also restrictive: inflation at 4.2% remains well above the Federal Reserve’s 2.0% target, leaving limited support for Bitcoin to hold above $60,000 on a sustained basis under hawkish policy, weaker seasonal conditions and insufficient liquidity.
Trend model remains bearish below $73,700
BIT Research said its trend model continues to read bearish as long as Bitcoin trades below $73,700. The report also noted that the key resistance level will gradually move lower over time. On the technical side, $62,446 remains an important support level. If that level is broken, the existing downward trend would face additional acceleration pressure.
The report compared the current setup with the bottoming process seen in 2022. It said the market does not have to begin a new rally quickly; instead, Bitcoin may spend an extended period moving sideways and gradually forming a cyclical low. As clearing progresses, this adjustment still has a path toward building a cycle bottom during the summer, although the report did not frame that process as an immediate reversal into a new uptrend.
Stablecoin growth slows and rolling flows remain negative
Liquidity is becoming the central constraint for the market. Daily trading volume has at times fallen to around $50 billion. During the July-to-October rally in 2025, average daily trading volume was about $200 billion, meaning current volume is only around 25% of that earlier peak. Stablecoin growth has also slowed sharply. The 12-month rolling growth rates of USDT and USDC reached 52% and 122%, respectively, in late 2025, but both have now fallen back to roughly 20% year on year. Their six-month growth rates are closer to zero, reflecting a clear weakening in new liquidity.
Inflows from Bitcoin ETFs and Strategy, formerly MicroStrategy, have also weakened compared with earlier periods. Strategy had previously financed Bitcoin purchases through aggressive issuance of STRC preferred shares, which at one point helped push Bitcoin up by about $15,000, a rise close to 20%. That support effect is now fading. The report said the market’s 30-day rolling fund flow remains in net outflow. Before a new and powerful catalyst emerges, it remains difficult for a sustained upward trend to form.
Overall, BIT Research’s view is that Bitcoin remains pressured in the short term by hawkish policy, weak summer seasonality and shrinking liquidity. The adjustment may still contribute to preparation for the next bull-market cycle, but the current conditions do not yet provide sufficient evidence for a rapid return to sustained upside. The above views are partly drawn from BIT on Target, and the full BIT on Target report is available by contacting the team.