Analysts say July could be a strong month for bitcoin and ether based on historical trends
Quick Take
- July’s positive seasonality could be notable for crypto investors, as bitcoin and ether have historically performed better during this month.
- QCP Capital analysts reported that bitcoin has a median return of 9.6% in July and often rebounds after a negative June.
- Coinbase analysts noted a similar seasonal trend, suggesting that positive seasonality and improved liquidity could support the market.
July's positive seasonality could be significant for cryptocurrency investors, as both bitcoin and ether historically perform better during this month, analysts said.
"Looking at seasonality, bitcoin has a median return of 9.6% in July and tends to bounce back strongly especially after a negative June, where it fell -9.85%, with many signs point to a bullish July," QCP Capital analysts said in a report on Monday. The report added that bitcoin options were positioning for an upside move last Friday into June's month-end expiry.
July has been historically a stronger month for bitcoin
Coinbase analysts David Duong and David Han also noted the same historical seasonal trend. "Positive seasonality in July and improved liquidity could support the market," the analysts said in Friday's Coinbase weekly report.
RELATED INDICES
According to the Coinbase analysts, positive seasonality could be relevant in July, as both bitcoin and ether historically seem to do better during this month than others, particularly after sell-offs in June. "The current market setup looks supportive, as a lot of excess length has been cleaned out following the Mt. Gox announcement. Moreover, liquidity could improve after daily average volumes for bitcoin and ether (spot and futures) across global exchanges declined by 16.7% between May and June from $90 billion to $75 billion," the analysts added.
However, bitcoin could face sell-side pressure this month due to the commencement of repayments in bitcoin and bitcoin cash to Mt. Gox creditors. According to JPMorgan analysts, these creditors are expected to sell part of their bitcoin receivables, initially putting pressure on the market, but with the potential for a recovery from August onwards.
Bitcoin 
BTC
-4.55%
started July by surging from the $60,000 region to a high of $63,500 on Monday, after last week's brief fall into the $59,000 region. The rally followed a recovery in spot bitcoin exchange-traded fund (ETF) inflows, which reached $73 million in net inflows on Friday, the highest daily inflow in two weeks.
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