Bitcoin analysts are expressing increasing confidence in the cryptocurrency's ability to quickly absorb selling pressure, setting a potentially bullish stage for July. This perspective is supported by several factors, including historical trends, growing institutional interest, and the behavior of both short-term and long-term holders.
One key observation is the market's capacity to re-accumulate Bitcoin following periods of distribution by long-term holders. Digital asset analytics firm Glassnode noted that long-term holders, defined as those holding coins for over 155 days, have been re-accumulating BTC after previous waves of selling. This re-accumulation helps to counterbalance the sell-side pressure and stabilize price action. The trend suggests a cyclical balance that may contribute to reducing price volatility.
Further reinforcing this bullish outlook is the apparent conviction among newer investors. Those transitioning into long-term holder status, specifically those holding Bitcoin for three to six months, are showing a sharp increase in wealth held. Many of these coins were acquired near all-time high levels, and the continued holding signals conviction rather than capitulation. Additionally, the selling of Bitcoin by those holding for three to six months is at its lowest level in nearly four years, suggesting relative market strength. This inactivity indicates that recent top buyers are holding their positions despite recent volatility.
Institutional demand also plays a crucial role in absorbing selling pressure. Corporate buyers are increasingly accumulating Bitcoin as part of a broader strategy to diversify holdings and hedge against inflation. This accumulation provides a floor for Bitcoin's price, preventing sharp declines. The stability around the $100,000 mark is attributed to the balance between selling pressure from long-term holders and buying activity from institutional investors and ETFs.
However, some analysts note the potential for short-term dips before a significant breakout. Data from Swissblock indicates a persistent negative spot volume delta, signaling selling pressure despite recent price rebounds. This suggests that a short-term dip might occur before a rally, with on-chain cost-basis for short-term holders outlining a support range between $97,000 and $94,000. Despite these potential short-term fluctuations, the overall sentiment remains positive. Analysts forecast that Bitcoin could exhibit significant volatility once it attains new highs, but the underlying trend remains bullish.
Looking at July specifically, historical data suggests a positive seasonal trend for Bitcoin. Bitcoin traders are optimistic about the cryptocurrency's performance in July, anticipating that it will follow the trend of the S&P 500 index and reach new all-time highs. July has historically been a profitable month for the S&P 500, with a tendency to track the performance of traditional stock markets.
Technical analysis provides further insights. Bitcoin's price action has been range-bound, with a bearish engulfing pattern signaling hesitation below $108,800. However, the area around $106,500 has held firm, providing a psychological floor. A successful push beyond $108,800 would signal renewed momentum and potentially attract sidelined investors.
Overall, Bitcoin analysts maintain a bullish outlook for July, supported by the market's ability to absorb selling pressure, increasing institutional demand, positive seasonal trends, and constructive technical signals. While short-term volatility remains a possibility, the long-term trajectory appears positive, with potential for a significant breakout in the near future.
