coindesk.com
Since April, Bitcoin's price has ranged between $59,000 and $74,000, but historical trends suggest a potentially bullish July.
Seasonal cycles, such as profit-taking around tax season in April and May, and increased demand in December, can influence cryptocurrency prices, leading to predictable changes.
Bitcoin ($BTC) bulls may have reason to cheer in the coming weeks as possible seasonal cycles boost prices of the largest cryptocurrency after months of declines and rangebound trading.
$BTC has traded between $59,000 and $74,000 since April, weighed down by billions in sales, upcoming selling pressure, outflows from exchange-traded funds (ETFs), and peak negative sentiment among retail traders.
But a historically bullish month of July could soon change that. The first day of the month saw U.S.-listed ETFs record nearly $130 million in inflows – their highest since early June after more than $900 million in outflows over the month.
“Bitcoin has a median return of 9.6% in July and tends to bounce back strongly, especially after a negative June (-9.85%),” Singapore-based QCP Capital flagged in a Telegram broadcast Monday.
“Our options desk also saw flows positioning for an upside move last Friday into the month-end, possibly in anticipation of the ETH spot ETF launch. Many signs point to a bullish July,” QCP added.
Over the last decade, bitcoin has gained by an average of more than 11% in July, with 7 out of 10 months showing positive returns, data shows.
Crypto fund Matrixport said in a 2023 report that July returns from 2019 to 2022 have been around 27%, 20%, and 24%, respectively.
Seasonality is the tendency of assets to experience regular and predictable changes that recur every calendar year. While it may look random, possible reasons range from profit-taking around tax season in April and May, which causes drawdowns, to the generally bullish “Santa Claus” rally in December, a sign of increased demand.