TLDR

  • Bitcoin has gained about 4.5-5% since the weekend

  • Analysts predict a potentially bullish July for Bitcoin based on historical trends

  • On-chain metrics show network-wide accumulation but also hint at potential issues

  • Bitcoin ETFs recorded $124 million in inflows on the first day of July

  • Some experts suggest a “relief rally” may be beginning as selling pressure diminishes

Bitcoin, the world’s largest cryptocurrency, has seen a price increase of about 4.5-5% since the last weekend of June. This uptick has caught the attention of traders and analysts, who are now looking ahead to what July might bring for the digital asset.

Historically, July has been a strong month for Bitcoin. Data shows that over the last decade, Bitcoin has gained an average of more than 11% in July, with 7 out of 10 months showing positive returns.

Some trading firms, like Singapore-based QCP Capital, point out that Bitcoin has a median return of 9.6% in July and tends to bounce back strongly, especially after a negative June.

This historical trend is contributing to optimistic forecasts for the coming weeks. The first day of July saw U.S.-listed Bitcoin ETFs record nearly $130 million in inflows – their highest since early June. This comes after more than $900 million in outflows over the previous month, suggesting a potential shift in investor sentiment.

On-chain metrics are providing mixed signals about Bitcoin’s current state. The 30-day MVRV (Market Value to Realized Value) ratio is negative, indicating that short-term holders are currently at a loss. However, the mean coin age has been trending higher over the past six weeks, which is typically a positive sign. This combination suggests network-wide accumulation and potentially signals an undervalued asset.

However, not all indicators are bullish. The Network Value to Transactions Ratio suggests that Bitcoin might be overvalued compared to the amount of BTC transacted on-chain daily.

Some analysts have raised concerns about “artificial demand,” noting that it’s primarily crypto exchanges buying up Bitcoin being sold in recent weeks, rather than wider market participation.

Despite these concerns, many experts believe that a “relief rally” may be on the horizon. Crypto intelligence platform Santiment suggests that negative market sentiment and trader losses mean “a relief rally may just be beginning.”

???? Looking at July's outlook, there is major reason to be optimistic after so much small trader capitulation. The crowd's negativity and average trader losses means that a relief rally may just be beginning. Read our June monthly recap here! https://t.co/1359OPYMuY

To read our… pic.twitter.com/ZEVCm3sz2H

— Santiment (@santimentfeed) July 2, 2024

This view is echoed by CryptoQuant analyst Minkyu Woo, who observed that large-scale selling pressure on exchanges appears to be diminishing based on Tether outflow patterns.

Looking at the technical side, Bitcoin’s price action has defended important support levels. The support zone stretching back to March 1st was retested and held, as were the range lows of the past three months’ price action. At the time of writing, the mid-range mark at $63,300 is serving as resistance.

It’s important to note that the cryptocurrency market still faces some potential headwinds. The upcoming release of $9 billion worth of Bitcoin from the long-bankrupt Mt. Gox exchange could lead to selling pressure as creditors seek to cash out their long-locked crypto assets.

The post Is Bitcoin’s Summer Slump Over? BTC On The Rise as Analysts Predict Bullish July appeared first on Blockonomi.