Janice R. Andrews
After months of falls and rangebound trading, prospective seasonal cycles and recent inflows into exchange-traded funds (ETFs) point to a bullish trend for the largest cryptocurrency, which gives bitcoin bulls cause for celebration in the upcoming weeks.
The price of Bitcoin (BTC) has fluctuated between $59,000 and $74,000 since April, with notable selling pressure, withdrawals from exchange-traded funds (ETFs), and a surge in negative sentiment among individual traders. Notwithstanding these obstacles, past patterns and current market activity point to a positive July.
U.S.-listed Bitcoin ETFs had inflows of around $130 million on July 1st, marking the highest amount since early June. This inflow of funds indicates that investor interest has returned after outflows of almost $900 million in the preceding month. Bitcoin tends to rebound quickly, especially after a dismal June, and has a median return of 9.6% in July, according to Singapore-based QCP Capital. Adding to the positive outlook, QCP Capital said in a recent Telegram broadcast that flows were positioned for an upside move, potentially ahead of the introduction of the Ethereum (ETH) spot ETF.
The optimism is supported by historical facts. In July of the last ten years, Bitcoin has gained an average of 11%, with seven out of ten months having positive returns. According to data from the cryptocurrency fund Matrixport, July returns from 2019 to 2022 were roughly 27%, 20%, and 24%, respectively.
These trends are mostly influenced by seasonality, and the propensity of assets to undergo regular and predictable variations each calendar year. Other reasons contribute to these periodic cycles for Bitcoin. Price drawdowns are usually the result of profit-taking during tax season in April and May, while the “Santa Claus” rebound at the end of the year is usually caused by higher demand in December.
Given the recent spike in ETF inflows and the seasonal pattern of Bitcoin, it appears that traders are setting themselves up for a possibly bullish July. This confidence is further fueled by the expectation of further ETF launches, such as the ETH spot ETF.
In conclusion, even if the price of Bitcoin has been largely steady since April, ranging from $59,000 to $74,000, historical patterns and current market moves suggest that the price may be headed higher in July. Investors and traders are keeping a careful eye on these developments in the hopes of seeing solid results in the upcoming weeks.
