BIT Research said the crypto market is moving through an adjustment phase shaped by policy expectations and changing liquidity conditions. 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 delivered an unexpectedly hawkish signal, weakening the market’s earlier expectation for a more accommodative policy backdrop.
Hawkish policy signals remove a key anchor
According to the report, the current pricing environment still lacks a macro catalyst strong enough to drive a new upward leg. Daily trading volume has contracted sharply from its 2025 peak, stablecoin growth has continued to slow, and the support once created by Strategy, formerly MicroStrategy, through Bitcoin purchases funded by STRC preferred stock issuance is gradually fading. Under the combined pressure of policy uncertainty, weaker summer seasonality and shrinking liquidity, Bitcoin’s short-term trend remains under pressure.
The market had previously expected Kevin Warsh to send a dovish message, but the FOMC instead shifted in a hawkish direction. Several officials indicated that further rate increases this year remain on the table if inflation pressure persists. Warsh also made clear his intention to rebuild policy credibility. By refusing to disclose his own interest-rate dot-plot projection, he left the market without a clear policy anchor, and risk premiums rose as a result. The report notes that this kind of uncertainty has historically been unfavorable for sustained Bitcoin rebounds.
Key levels: $73,700 resistance and $62,446 support
The trend model cited by BIT Research shows that as long as Bitcoin remains below $73,700, the broader trend stays bearish, while key resistance levels will gradually move lower over time. On the technical side, $62,446 remains an important support level. A break below that area would add pressure for the downward trend to accelerate.
The report also compares the current setup with the bottoming process seen in 2022. Rather than a rapid reversal into a new rally, the market can undergo an extended period of sideways consolidation while gradually forming a cyclical low. In this reading, the present adjustment is less about immediate upside momentum and more about the market completing a clearing process.
Stablecoin growth and capital inflows continue to cool
Beyond macro policy, insufficient liquidity has become the central constraint facing the market. Daily trading volume has at times dropped to around $50 billion. By comparison, during the rally from July to October 2025, average daily trading volume was about $200 billion. Current activity is only about 25% of that earlier peak level.
Stablecoin growth has also slowed significantly. The 12-month rolling growth rates for USDT and USDC reached 52% and 122%, respectively, at the end of 2025. Both year-on-year growth rates have now fallen to around 20%, while six-month growth rates are closer to zero. BIT Research said this reflects a clear weakening in new liquidity entering the market.
Capital inflows from Bitcoin ETFs and Strategy have also weakened compared with earlier periods. Strategy’s aggressive issuance of STRC preferred stock had previously helped push Bitcoin up by about $15,000, a gain close to 20%, but that support is now fading. The market’s 30-day rolling capital flow remains in net outflow, and a sustained upward trend remains difficult to form before the arrival of a new strong catalyst.
Overall, the report notes that inflation at 4.2% remains far above the Federal Reserve’s 2.0% target. With hawkish policy signals, weaker summer seasonality and insufficient liquidity all weighing on the market, Bitcoin still lacks enough support to hold sustainably above $60,000 in the short term. Some of the views above come from BIT on Target, and the full BIT on Target report is available by contacting the source.