Bitcoin (BTC) July Outlook: 7% Historical Gains & Strong Institutional Buying Signal Potential Rally Despite Bearish Derivatives

According to @FarsideUK, historical data suggests a bullish trend for Bitcoin (BTC) in July, with the cryptocurrency rising in all but three Julys over the past decade for an average increase of about 7%, based on CoinGlass data. Analysis from market maker Wintermute further supports this, finding that since 2022, July is the only month combining relatively strong gains with subdued investor sentiment. Institutional interest is surging, as publicly listed firms acquired approximately 131,000 BTC in the second quarter, an 18% jump that surpassed the 8% increase in U.S. spot-ETF holdings. From a derivatives perspective, while BTC and Ethereum (ETH) futures open interest remains flat, XRP's open interest has reached a four-week high with signals of bearish bets, according to the source. Traders should monitor key upcoming token unlocks, including Ethena (ENA) on July 2, Aptos (APT) on July 12, and Arbitrum (ARB) on July 16, as well as macroeconomic events like the U.S. payrolls report which will likely influence Federal Reserve policy.
SourceAnalysis
Bitcoin (BTC) is demonstrating a quiet resilience as it enters July, posting a modest 0.9% gain over the past 24 hours to trade around $107,684. This follows a record monthly close at the end of June, setting the stage for a potentially bullish month if historical patterns hold true. According to data from CoinGlass, July has been a positive month for Bitcoin in seven of the last ten years, boasting an average increase of approximately 7%. Further supporting this outlook, analysis from market maker Wintermute reveals a unique trend for July. By examining the average daily bitcoin funding rate against spot returns since 2022, they found July is the only month that combines relatively strong gains with subdued investor sentiment. The data showed that in the past three years, Bitcoin has returned over 0.3% per day on average during July, while funding rates remained close to zero, suggesting gains were not driven by overheated leverage.
Institutional Conviction Meets Market Caution
Despite these historically positive indicators, the broader market is sending mixed signals, creating a complex trading environment. While institutional appetite remains robust, derivatives markets suggest a more cautious or indifferent stance. Publicly listed companies showcased strong conviction in the second quarter, acquiring roughly 131,000 BTC, an 18% increase that outpaced the 8% growth in U.S. spot ETF holdings. However, this bullish fundamental is contrasted by recent ETF outflows, with spot BTC ETFs seeing a significant daily net outflow of $342.2 million, according to data from Farside Investors. This divergence highlights a potential disconnect between long-term corporate strategy and short-term trader sentiment.
Derivatives and On-Chain Signals
The derivatives market reinforces this sense of caution. Open interest for both BTC and ETH futures has remained flat at around $25 billion and $11 billion, respectively, indicating a lack of new capital and directional conviction from traders. The CME futures premium for Bitcoin has also slid to its lowest level since October 2023, a signal of waning institutional appetite for leveraged long positions. Furthermore, while the Binance BTC funding rate hovers at a neutral 0.006%, other assets like XRP, SOL, and BCH are exhibiting negative funding rates, pointing to a bearish bias among speculators in the altcoin market. On the options front, data from Deribit shows a lack of clear directional bias for near-term BTC and ETH expiries, with only mild bullishness appearing in contracts expiring in September and October. This suggests traders are hedging or positioning for volatility further out, but remain uncertain about the immediate price trajectory.
Macroeconomic Headwinds and Geopolitical Risks
Looming macroeconomic factors present the most significant test for Bitcoin's potential July rally. The U.S. Dollar Index (DXY), which typically moves inversely to Bitcoin, is trading at a three-year low and approaching a technical 'death cross' pattern—an indicator that has historically marked bottoms for the dollar. A strengthening dollar could create significant headwinds for BTC. All eyes are on Thursday's U.S. payrolls report, which will provide crucial clues about the Federal Reserve's next move on interest rates. Fed Chair Jerome Powell's recent stance of waiting to see how tariffs impact inflation adds another layer of uncertainty. This cautious sentiment is echoed in the broader crypto market, where capital flows have become selective and risk-averse. According to analysis from XBTO, while major assets like BTC and ETH held steady, the wider basket of altcoins experienced a more significant sell-off, indicating that capital is consolidating into perceived safe havens within the asset class rather than fleeing entirely. Traders are closely watching key support levels, as a break below the 50-day simple moving average, which has acted as strong support this month, could invite stronger selling pressure.
Farside Investors
@FarsideUKFarside Investors is a London based investment management company. Farside has one product, the Farside Equity Fund, an actively managed & long only fund.