Is the Summer Slump of Bitcoin Over BTC Increasing as Analysts Anticipate a Bullish July
Bitcoin has surged by approximately 4.5-5% since the weekend, sparking interest among traders and analysts who are now eyeing the potential for a bullish July in the cryptocurrency’s market.
Historically, July has been a robust month for Bitcoin. Data spanning the last decade reveals an average July gain exceeding 11%, with positive returns seen in 7 out of 10 instances. Firms such as Singapore-based QCP Capital highlight Bitcoin’s median return of 9.6% during this month, often rebounding strongly following a negative June.
This optimistic outlook is supported by recent developments. On July 1st, U.S.-listed Bitcoin ETFs attracted inflows nearing $130 million – the highest since early June. This contrasts sharply with over $900 million in outflows observed in the preceding month, potentially signaling a shift in investor sentiment.
However, assessments from on-chain metrics present a mixed picture of Bitcoin’s current status. The 30-day MVRV ratio indicates short-term holders are currently experiencing losses, while the increasing mean coin age typically signifies positive accumulation trends, hinting at a potentially undervalued asset.
Yet, caution is advised amidst concerns raised by certain indicators. The Network Value to Transactions Ratio suggests Bitcoin may be overvalued relative to its on-chain transaction volume. Analysts have also flagged concerns about “artificial demand,” attributing recent Bitcoin purchases primarily to crypto exchanges rather than broader market participation.
Nevertheless, amidst these reservations, there is optimism brewing among experts for a potential “relief rally.” Santiment, a crypto intelligence platform, points to negative market sentiment and trader losses as indicators that such a rally may be underway. Minkyu Woo from CryptoQuant notes a reduction in large-scale selling pressures on exchanges, observing patterns in Tether outflows.
From a technical standpoint, Bitcoin’s price action has shown resilience by maintaining crucial support levels. Notably, the support zone since March 1st has held firm, alongside the lows observed in the past three months’ price fluctuations. Currently, Bitcoin faces resistance at the mid-range mark of $63,300.
However, potential challenges lie ahead for the cryptocurrency market. The impending release of $9 billion worth of Bitcoin from the long-dormant Mt. Gox exchange could introduce selling pressures as creditors seek to liquidate their long-held crypto assets.
