BIT Research said the crypto market is now in an adjustment phase shaped by policy expectations and changes in liquidity. An easing in geopolitical tensions and the stronger-than-expected performance of the SpaceX IPO had previously helped Bitcoin rebound from technically oversold levels. However, newly appointed Federal Reserve Chair Kevin Warsh unexpectedly sent a hawkish signal, removing the support that traders had expected from a more accommodative policy outlook.
At the same time, stablecoin liquidity continues to contract, and new capital entering the market is clearly insufficient. Trading activity has returned to the thinner conditions that are typical of the summer period. From the current pricing perspective, the report says the market still lacks the macro catalyst needed to drive a new upward leg. Daily trading volume has shrunk sharply compared with the 2025 peak, stablecoin growth has continued to slow, and the support from Strategy, formerly MicroStrategy, after its Bitcoin purchases funded through STRC preferred stock issuance is gradually fading.
The market had broadly expected Kevin Warsh to deliver a dovish signal after taking over as Fed chair, but the FOMC instead moved in a hawkish direction. Several committee members indicated that if inflation pressure persists, further rate increases this year remain on the table. Warsh also made clear his determination to rebuild policy credibility. According to the report, his refusal to disclose his personal rate dot-plot projection deprived the market of a clear policy anchor, leading to a rise in risk premium. In historical experience, this type of uncertainty has not been favorable for a sustained Bitcoin rebound.
The trend model cited by BIT Research shows that as long as Bitcoin remains below $73,700, the overall trend stays bearish, while the key resistance level will gradually move lower over time. From a technical perspective, $62,446 remains an important support level. If Bitcoin breaks below that area, the downtrend could accelerate further. The report also compares the current market with the bottoming process seen in 2022, suggesting that the market can go through an extended period of consolidation before completing the construction of a cyclical low.
Beyond macro factors, insufficient liquidity has become the central constraint facing the market. Daily trading volume has at times fallen to around $50 billion, compared with an average daily volume of about $200 billion during the July-to-October 2025 rally. That means current turnover is only around 25% of the previous peak level. Even when Bitcoin rebounds, the report indicates that the market does not yet have the volume support that accompanied the earlier advance.
Stablecoin growth has also slowed materially. The 12-month rolling growth rates of USDT and USDC reached 52% and 122%, respectively, in late 2025. At present, both year-on-year growth rates have fallen back to around 20%, while the six-month growth rates are closer to zero. This reflects a clear weakening in new liquidity. Meanwhile, inflows linked to Bitcoin ETFs and Strategy have also declined compared with earlier levels. Strategy’s aggressive issuance of STRC preferred stock once helped push Bitcoin up by around $15,000, a gain of nearly 20%, but that supporting effect is now fading.
The report adds that the market’s 30-day rolling fund flow remains in net outflow territory. Without a new and powerful catalyst, a sustained upward trend remains difficult to form. Overall, inflation at 4.2% is far above the Federal Reserve’s 2.0% target. Under the combined pressure of a hawkish policy stance, weaker summer seasonality and insufficient liquidity, Bitcoin still lacks enough support to remain firmly above $60,000 in the short term. However, as the market gradually completes its clearing process, this adjustment still has room to form a cyclical low during the summer. The price does not have to begin a new rally immediately, but the process is being framed as preparation for the next bull-market cycle. Part of the above view comes from BIT on Target, and readers can contact BIT on Target for the complete report.
