July script is set—how will Bitcoin stage its comeback?
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July script is set—how will Bitcoin stage its comeback?
Macro outlook may improve, and Ethereum ETFs will bring new capital to the crypto market.
Navigating Web3 tides with focused insightsBy Asher Zhang, TechFlow
The author expects Bitcoin to face significant downward pressure in early July, but a shift between bulls and bears is likely to quietly occur by mid-to-late July. Based on a comprehensive analysis of various information, the author has preliminarily outlined the script for July. So, what will enable Bitcoin to stage a strong comeback?
Dark clouds loom over the city — What pressures will BTC face at the start of the month?
Recent large-scale Bitcoin and Ethereum sales by the U.S. and German governments have weighed heavily on the market. Meanwhile, Mt.Gox is scheduled to begin repayments in July 2024, with early July expected to bring substantial selling pressure on Bitcoin.
According to blockchain analytics firm Chainalysis, on June 26, 2024, the U.S. government transferred approximately 3,940 BTC—worth about $240 million—to the Coinbase exchange. Market analysts believe these are likely the Bitcoins seized in January 2024 from convicted drug trafficker Bamit Singh. The U.S. government currently holds around 214,000 BTC, valued at $13 billion, making it the largest national holder of Bitcoin. On July 1, Arkham data showed that a U.S. government wallet transferred roughly 3,375 ETH (approximately $11.72 million) to an address starting with 0x5ac4.
As reported by TechFlow, Germany’s Federal Criminal Police Office (BKA) began transferring around 11,100 BTC—valued at approximately $724 million—to crypto exchanges such as Kraken and Bitstamp in mid-June. These Bitcoins were seized by German authorities in 2013. On July 1, Lookonchain data indicated that the German government moved another 1,500 BTC ($94.7 million), including 400 BTC ($25.3 million) sent to Bitstamp, Coinbase, and Kraken. Germany currently holds about 470,000 BTC, making it one of the world’s largest national holders. The German government has maintained a cautious stance toward cryptocurrencies and has repeatedly expressed concerns about their potential use in money laundering and other illegal activities. Notably, Germany is drafting cryptocurrency regulations expected to take effect in 2025. Its Bitcoin sales may signal its official position on digital assets.
In addition to ongoing sales by the U.S. and German governments, the primary source of selling pressure comes from Mt.Gox. According to its official website, Mt.Gox's latest compensation plan for creditors includes base repayment and proportional repayment. The base repayment allows each creditor to claim up to 200,000 JPY in Japanese yen. For proportional repayment, creditors have two flexible options: “early lump-sum repayment” or “interim and final repayment.” The lump-sum option only returns a portion of creditors’ funds (about 21% of the amount locked during the hack). Amounts exceeding 200,000 JPY can be repaid either as a mix of BTC, BCH, and JPY, or entirely in fiat currency. Latest updates confirm that Mt.Gox will begin repayments in July 2024.
Macroeconomic outlook may improve — Ethereum ETFs could bring new capital to crypto
This article identifies several key factors that could drive Bitcoin’s recovery in July: the launch of spot Ethereum ETFs, macroeconomic trends, technological upgrades, and potential support from Donald Trump.
This week features several major macroeconomic events, which current market analysis suggests could positively impact the crypto ecosystem. On July 1, the U.S. released its June ISM Manufacturing PMI; on July 2, Federal Reserve Chair Jerome Powell, ECB President Christine Lagarde, and Central Bank of Brazil Governor Roberto Campos Neto spoke at the ECB’s Central Banking Forum, while the Reserve Bank of Australia published its June monetary policy meeting minutes; on July 3, the U.S. released its June ADP employment data and weekly initial jobless claims; on July 4, the Fed released its monetary policy meeting minutes, the UK held its general election, and the ECB published its June monetary policy meeting minutes; on July 5, the U.S. released its June unemployment rate and nonfarm payrolls data.
Adam, a macro researcher at Greeks.live, wrote on X that this week (July 1–7) is a major macro week, with Friday’s U.S. unemployment and nonfarm payroll data being most critical. After a period of calm, macro markets are reactivating, with important events every weekday. On the crypto front, markets anticipate that the SEC may respond to ETH ETF applications during the week of July 8, likely with positive news. With quarterly settlements just concluded, implied volatility across major tenors remains low—making it an ideal time to build positions.
Current indications suggest spot Ethereum ETFs could launch as early as early July, injecting fresh capital into the crypto market. Unlike Bitcoin’s relatively limited on-chain ecosystem, new inflows into Ethereum could further accelerate development within its ecosystem.
Bitcoin may undergo major technical upgrades — Trump could fuel its rebound
The author has long believed that technological innovation drives Bitcoin and the broader crypto industry—be it past waves like ICOs, DeFi, and Layer2, or recent developments such as Bitcoin’s Ordinals protocol, BRC20, and ARC20. This article argues that the next major catalyst for Bitcoin’s growth will undoubtedly be OP_CAT, now gaining widespread attention.
OP_CAT was proposed last October by Ethan Heilman and Armin Sabouri, recently launched on Bitcoin’s Signet testnet, and assigned BIP-420. On July 1, OP_CAT supporter and Taproot Wizards CEO Udi Wertheimer stated on the Xverse podcast that the activation probability of OP_CAT is “close to 100%.” Many prominent figures in crypto, including Solana Labs co-founder Anatoly Yakovenko, have added “BIP-420” to their X usernames. Taproot Wizards launched the Quantum Cats Ordinals collection in February to promote OP_CAT. In April, they released a whitepaper outlining a framework for building applications using OP_CAT. Earlier, Starknet announced on X its intention to expand execution layers for both Bitcoin and Ethereum. Clearly, OP_CAT is poised to inject new vitality into Bitcoin’s ecosystem.
Beyond technical upgrades, Trump could help channel retail capital into Bitcoin in late July. On June 25, tech media Axios cited two sources stating that former U.S. President Donald Trump is discussing plans to speak at the Bitcoin 2024 conference in Nashville at the end of July. Hosted by Bitcoin Magazine, the event is scheduled for July 25–27. Representatives from Bitcoin Magazine did not respond to requests for comment.
Given Trump’s previous statements, his appearance at the Bitcoin conference seems credible. As reported by TechFlow on June 12, CleanSpark Executive Chairman Matthew Schultz revealed that several Bitcoin miners met with Trump at Mar-a-Lago on a Tuesday evening. Schultz noted that Trump expressed love and understanding for cryptocurrencies, emphasized that Bitcoin mining helps stabilize the U.S. power grid, and pledged to advocate for miners if elected president. Trump also posted on Truth Social that Bitcoin mining is America’s last line of defense against other central bank digital currencies, and expressed hope that all remaining Bitcoin should be mined in the U.S. Earlier, Trump’s campaign announced it would accept cryptocurrency donations—an overt gesture of support for the crypto industry.
Trump’s recent high-profile endorsement of Bitcoin appears largely driven by electoral strategy, given the vast community and capital behind Bitcoin and the broader crypto market. Cathie Wood, CEO of U.S. investment firm Ark Invest, said she plans to vote for Republican candidate and former President Donald Trump in this year’s presidential election. A long-time crypto advocate, Wood cited Trump’s recent strong support for the crypto industry as her primary reason for backing him.
Conclusion
Let us now summarize Bitcoin’s July script. Overall, Bitcoin is expected to perform weakly in early July due to selling pressure from the U.S. and German governments and Mt.Gox repayments. However, the first week of July may introduce some macro-level optimism. As these negative factors are digested by the market, Bitcoin is likely to gradually strengthen. In late July, Trump could provide a significant boost. Meanwhile, OP_CAT—the true engine driving Bitcoin’s growth—will meaningfully advance Bitcoin and its ecosystem.
Finally, seasonal patterns also suggest a potential rise. As reported by TechFlow, QCP Capital analysts said in a Monday report: “Seasonally, Bitcoin’s median return in July is 9.6%, and it tends to rebound strongly—especially after dropping 9.85% in June, many signs point to a bullish July.” Coinbase analysts David Duong and David Han noted in their weekly report: “Positive seasonality in July and improving liquidity could support the market.”
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