Bitcoin is entering a closely watched phase as the Federal Reserve begins a leadership shift under Kevin Warsh, according to CryptoQuant analyst XWIN Japan. Markets are now focused on whether the new Fed leadership will tighten financial conditions or maintain support for risk assets.
In its latest analysis, XWIN Japan said Warsh has consistently criticized aggressive quantitative easing and prefers a more disciplined monetary approach. As a result, investors now expect a shift from a “market-rescuing Fed” to a more restrictive stance.
That change is important for Bitcoin because institutional players, including ETFs, hedge funds, and derivatives markets, now drive most of its trading activity.
The analyst said Bitcoin now responds more quickly to changes in macroeconomic policy than in earlier cycles. He added that tighter financial conditions could reduce demand for risk assets among institutional investors. As a result, market attention has shifted away from halving cycles and retail sentiment toward liquidity conditions and interest rate expectations.
XWIN Japan pointed to Coinbase Premium as an early signal of institutional demand in the U.S. The metric tracks spot buying activity from large investors. When interest rates remain high, demand often weakens. In that case, Coinbase Premium can turn negative, especially during risk-off periods.
He also highlighted exchange netflows as another key indicator. When more Bitcoin moves into exchanges, it often signals rising selling pressure. This trend usually appears when investors begin reducing risk exposure under tighter monetary conditions.
At the same time, leverage has become a major driver of price movements. However, weak spot demand can make price increases unstable. XWIN Japan warned that short-term rallies may reflect forced short covering rather than strong buying interest.
Rei Researcher said Bitcoin is now trading near a stressed cost zone around $77,500. The analyst pointed to “UTXOs in Loss” holding near 100 million BTC exposure. At the same time, the 6 to 12-month realized price trend continues to decline. As a result, short-term holders face growing pressure to reduce exposure.
The analyst also pointed to a sharp increase in funds moving into long-term holder wallets on May 20. While that can sometimes signal growing investor confidence, he cautioned that the activity may have been driven by large holders shifting assets between their own wallets rather than fresh buying. As a result, he said the data should not automatically be viewed as a strong bullish signal.
He also noted that reserves on Binance continue to post periodic increases, an indication that available supply in the market has not tightened completely despite Bitcoin’s recent gains. The trend shows that traders remain active on both sides of the market, with buyers and sellers still battling for control around key price levels.
At the same time, macroeconomic expectations remain a major driver of Bitcoin’s direction. Traders now watch interest rate and policy signals for the second half of the year. Rei Researcher also warned that leverage could add instability given the unclear market structure.
Cryptoquant analyst Darkfost said Bitcoin traders have returned after about eight months of reduced leverage in the market. Earlier this year, Binance futures open interest fell below its 180-day average. That drop reflected a period where traders cut exposure due to macroeconomic uncertainty and geopolitical pressure.
However, the trend has now shifted. Open interest has climbed from $6.4 billion in March to $8.96 billion. It has also moved back above the 180-day average of $8.75 billion. This suggests that derivatives trading activity is picking up again and market participation is increasing.
Darkfost said this move signals the end of a prolonged risk-off phase. He added that traders are now returning to capture short-term rebound opportunities. However, he warned that the recovery remains fragile. Sharp price swings could still trigger a quick exit from leveraged positions.
Analyst Phila warned that Bitcoin could face a deeper correction, with a potential drop toward $55,000. In a post on X, he said Bitcoin has broken a 14-year support level. As a result, he described the move as capitulation rather than a normal correction.
He also compared current price behavior to the 2021 market structure. Based on that pattern, he suggested the market may still see another downturn phase. However, he noted that his broader forecasting record has been strong in previous cycles.
In contrast, short-term analyst Ali Martinez focused on immediate price levels near $77,800. He said this area now acts as a key resistance zone. If Bitcoin fails to break higher, the price could fall back toward $76,000 support.
However, a clean breakout above resistance could push momentum toward $79,000. Traders are now watching this narrow range closely for direction.
At the time of writing, Bitcoin was trading near $77,500, down 0.34% in the past 24 hours. Market volatility remains elevated as traders weigh both macroeconomic signals and technical pressure zones.
