BIT Research: Liquidity is disappearing, will Bitcoin repeat the bottoming trend of 2022?

The current market is in an adjustment phase dominated by policy expectations and changes in liquidity. The easing of geopolitical tensions and the better-than-expected performance of the SpaceX IPO once drove Bitcoin to rebound from technically oversold levels, but the new Federal Reserve Chairman Kevin Warsh unexpectedly released hawkish signals, causing the market to lose the expected support from easing expectations. Meanwhile, the liquidity of stablecoins continues to shrink, and new funds are clearly insufficient, leading the market to re-enter the typical low trading volume phase of summer.

From the current pricing perspective, the market still lacks macro catalysts sufficient to drive a new round of increases. Daily trading volume has significantly shrunk compared to the peak period in 2025, the growth rate of stablecoins continues to slow, and the support effect brought by Strategy (formerly MicroStrategy) buying Bitcoin through STRC preferred stock financing is also gradually weakening. Under the combined effects of policy uncertainty, seasonal weakness, and liquidity contraction, Bitcoin's short-term trend remains under pressure.

Hawkish Expectations Heat Up: Policy Uncertainty Suppresses Market Risk Appetite

The market previously widely expected the new Federal Reserve Chairman Kevin Warsh to release dovish signals, but the FOMC unexpectedly turned hawkish. Several committee members hinted that if inflation pressures persist, there may be further interest rate hikes this year, and Warsh also clearly expressed his determination to rebuild policy credibility.

Trend models show that as long as Bitcoin remains below $73,700, the overall trend will remain bearish, and key resistance levels will gradually decline over time. Meanwhile, Warsh refused to disclose his personal interest rate dot plot forecast, causing the market to lose a clear policy anchor, and the risk premium subsequently rose. Historically, such uncertainty often does not favor a sustained rebound in Bitcoin.

From a technical perspective, $62,446 remains an important support level. If this level is breached, the downward trend may accelerate further. However, similar to the bottoming process in 2022, the market may also experience a prolonged period of oscillation and gradually complete the construction of a cycle low.

Liquidity Continues to Shrink: Insufficient New Funds Limit Rebound Space

In addition to macro factors, insufficient liquidity is becoming the core constraint facing the current market. Daily trading volume has sometimes shrunk to about $50 billion, while the average daily trading volume during the rising phase from July to October 2025 was about $200 billion, only about 25% of the previous peak.

The growth of stablecoins has also clearly slowed. The 12-month rolling growth rates of USDT and USDC reached 52% and 122% respectively at the end of 2025, but the year-on-year growth rates have now fallen back to about 20%, with the 6-month growth rate closer to zero, reflecting a significant weakening of new liquidity.

Meanwhile, the inflow of funds from Bitcoin ETFs and Strategy has also noticeably weakened compared to before. Previously, Strategy's aggressive issuance of STRC preferred stock once pushed Bitcoin up by about $15,000, with an increase close to 20%, but this support effect is gradually fading. Currently, the market's 30-day rolling fund flow is still in a net outflow state, and without new strong catalytic factors, a sustained upward trend remains difficult to form.

Overall, the inflation level of 4.2% is far above the Federal Reserve's target of 2.0%. Under the combined influence of a hawkish stance, seasonal weakness in summer, and insufficient liquidity, Bitcoin's sustained stability above $60,000 in the short term still lacks sufficient support. However, as the market gradually clears, this round of adjustment may still build a cycle low this summer. Prices may not quickly initiate a new round of increases, but this process may be preparing for the next bull market cycle.

Some of the views above are from BIT on Target, Contact us to obtain the complete report of BIT on Target.

Disclaimer: The market has risks, and investment requires caution. This article does not constitute investment advice. Trading in digital assets may carry significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.