Live updates: Bitcoin could drop to $59,000 in the short-term as liquidity dries up

Trading firm Wintermute's options desk puts bitcoin in a $61,242 to $63,563 range for Tuesday, with correlation rising across tokens and no fresh ETF bid in sight.

Bitcoin's (BTC) price chart is flashing a bearish signal amid risk-off cues from currency markets.

The leading cryptocurrency fell by over 2% Tuesday, confirming a bear flag breakdown, a sign that the counter-trend bounce from June 5 lows has ended and the broader decline could resume. This pattern was flagged by an analyst early this week, warning of a sell-off to $55,000.

In the meantime, the euro-yen pair (EUR/JPY) has fallen to its lowest level since May 6, declining a notable 1.44% over the past seven days. Similarly, the British pound and the Australian dollar, a key commodity currency, have been losing ground to the yen, while the U.S. dollar index has climbed to 101.57, its highest level since May 2025.

This is a classic risk-off signal. Investors are rotating into traditional safe-haven currencies such as the Japanese yen and the U.S. dollar, while selling higher-yielding or risk-sensitive currencies like the euro, pound, and Aussie dollar amid rising global uncertainty.

National fiat currencies draw their value from yields on local government bonds. Bitcoin has no such inherent yield generating mechanism. As a result, it stands to lose further ground if these risk-off trends intensify.

The U.S. House of Representatives passed the Senate's Road to Housing bill 358-32 on Tuesday night, sending it to U.S. President Donald Trump for his signature. Trump is expected to sign the bill at noon ET on Wednesday. While the bill is largely focused on housing issues in the U.S., it has a 2-page provision banning the Federal Reserve from issuing a central bank digital currency for four years. Lawmakers have attached a similar CBDC ban in a number of bills, but this is the first time the provision is heading to the president's desk for a signature. The Fed has repeatedly suggested that it would not issue a CBDC without an explicit direction from Congress directing it to do so.

Bitcoin and ether are grinding toward the lower end of their recent ranges, major market making firm Wintermute's OTC trading desk said in a Wednesday note shared with CoinDesk, with both assets caught between last week's hawkish Fed and the stop-start Iran headlines.

Options markets price a relatively tight move for the next 24 hours. Wintermute's one-day straddle, a measure of expected swing derived from options pricing, put bitcoin in a $61,242 to $63,563 range and ether between $1,606 and $1,694, implying moves of about 1.9% and 2.7% respectively.

The backdrop is deteriorating. Token correlations are rising, meaning assets are moving together rather than on their own fundamentals, while liquidity is thinning into the summer months with no fresh institutional bid visible in ETF flows.

Wintermute flagged $59,000 as the level to watch, calling it the bear market low and the key support if current pressure continues.

Three catalysts shape the rest of the week: the U.S.-Iran peace deal and whether it holds, Thursday's PCE inflation print, the Fed's preferred measure of price growth, and the quarterly options expiry at month-end, which can amplify moves as traders roll or close large positions.

In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.

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