Bitcoin Price Holds Bullish Potential in July 2024: Here’s the Evidence!

Bitcoin Price Holds Bullish Potential in July 2024: Here’s the Evidence!

July often marks a recovery period for Bitcoin prices. Historical data from Coinglass reveals that Bitcoin frequently experiences significant gains in July, averaging around a 10% increase. This trend raises hopes that a similar pattern will continue in 2024, especially following a volatile second quarter.

Economic Indicators Support Bitcoin's July Surge

Several economic reports from the United States are predicted to bolster the bullish outlook for Bitcoin in July.

• Real GDP Growth: The US real Gross Domestic Product (GDP) grew at an annual rate of 1.4% in the first quarter of 2024, down from a 3.4% increase in the previous quarter.
• Personal Consumption Expenditure (PCE): The PCE price index decreased to 2.6% in May from 2.7% in April.

This economic slowdown could create uncertainty in traditional markets, prompting investors to seek alternative assets like Bitcoin. Jag Kooner, Head of Derivatives at Bitfinex, told Decrypt, “Historical trends show that during economic slowdowns, investors often turn to Bitcoin as a store of value.”

Further insights into the Federal Reserve’s policies are anticipated during the Federal Open Market Committee (FOMC) meeting on July 30-31, 2024. Futures traders are expecting two interest rate cuts in the last quarter of this year, which could benefit risk assets, including Bitcoin.

Bearish Challenges for Bitcoin’s Price in July

Despite the optimism, there are several bearish factors that could challenge Bitcoin’s price rise in July 2024:

Mt. Gox Compensation
Mt. Gox, which went bankrupt in 2014 after being hacked, is set to start repaying 140,000 BTC (approximately USD 9 billion) to its creditors beginning in early July 2024. Concerns are mounting that creditors might sell the Bitcoin they receive to realize profits. A significant sell-off could depress Bitcoin prices due to increased market supply.

Technical Indicators: NUPL
The Net Unrealized Profit and Loss (NUPL) indicator shows potential fatigue among Bitcoin buyers. A rising NUPL above 0 suggests more investors are in profit. As of June 30, Bitcoin’s NUPL was around 0.54, a level that often precedes market correction

While July 2024 holds promise for Bitcoin’s bullish momentum, market participants should remain vigilant of these bearish pressures that could temper price growth.

Conclusion

As July 2024 approaches, Bitcoin investors have reasons to be optimistic. Historical patterns suggest that Bitcoin often experiences a substantial price recovery in July, bolstered by an average increase of around 10%. Economic indicators from the United States, such as the slowing GDP growth and decreased PCE index, indicate potential instability in traditional markets, which could drive investors towards Bitcoin as a hedge. Additionally, expectations of Federal Reserve interest rate cuts later in the year could further support Bitcoin's attractiveness as a risk asset.

However, despite these bullish signals, several factors could pose challenges to Bitcoin's price growth. The impending release of 140,000 BTC by Mt. Gox to its creditors in early July could flood the market, leading to potential sell-offs that might depress prices. Moreover, the rising NUPL indicator suggests that many investors are currently in profit, a condition often followed by market corrections. Therefore, while the outlook for Bitcoin in July 2024 remains hopeful, investors should be cautious and mindful of these bearish pressures that could influence the market dynamics.

Read too : 3iQ Proposes Canada's First Solana ETF

*Disclaimer:
This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.