Market Analysis: July Crypto Recovery Potential
Throughout June, the crypto market experienced a significant decline by 14%, dropping from a high of $2.78 trillion to approximately $2.4 trillion. Historically, June tends to be a bearish month for the market. However, considering past trends, there is a possibility of a market recovery in July.
Past Performance Predicts July Upswing
Market analyst Murad Mahmudov shared a chart showcasing previous market bottoms in June, followed by a bullish recovery in July dating back to 2018. This historical pattern suggests that July could bring positive momentum to the crypto market.
- June 2023 witnessed the market cap dropping to slightly above $1 trillion.
- However, in July of the same year, the market experienced a substantial recovery, with gains exceeding 22% by mid-month.
- Despite the recovery, markets remained range-bound until the end of October, with a similar prediction for this year.
Analyst Insights on Bitcoin
According to analyst ‘Rekt Capital,’ Bitcoin is on the verge of challenging the June downtrend for a breakout. The analyst emphasized the importance of BTC achieving a daily close above the June downtrend to initiate a breakout. Currently, Bitcoin is forming a higher low and consolidating price action around $60,600 to prepare for a potential rally back to $71,500.
- Bitcoin prices surged by nearly 4% over the weekend, reaching an intraday high of $63,700 during Asian trading hours on Monday.
- ‘Rekt Capital’ noted that Bitcoin appeared to have successfully retested the previous major resistance level, which now serves as new support on the quarterly timeframe.
- However, the commencement of Mt. Gox repayments, anticipated to be over $8 billion in BTC, in early July could impact the asset’s performance.
M2 Money Supply Expansion Impact
Another critical factor to consider is the expansion of the M2 Money Supply, which has historically influenced crypto market cycles. An increase in the M2 Money Supply indicates more liquidity and investment in riskier assets such as cryptocurrencies.
- M2 Money Supply measures include cash, checking deposits, and easily convertible capital.
- When the M2 Money Supply expands, it implies that the central bank is increasing the money supply, potentially leading to fiat devaluation concerns and driving investments into store-of-value assets like crypto.
Observations on M2 Money Supply Expansion
Recent data points to the expansion of the M2 Money Supply, which could bode well for the crypto market. The increased liquidity and investment potential in riskier assets may positively impact the trajectory of cryptocurrencies in the coming months.
Conclusion: The Potential for a July Crypto Market Recovery
Considering the historical patterns of market performance in June and July, coupled with analyst insights on Bitcoin’s potential breakout and the expansion of the M2 Money Supply, there is a likelihood of a market recovery in July. While uncertainties such as the Mt. Gox repayments loom, the overall outlook for the crypto market remains optimistic as we head into the new month.
Hot Take: Optimism for July Crypto Performance
As we transition into July, the crypto market shows signs of potential recovery and positive momentum based on historical trends and key market indicators. Stay tuned for further developments and be prepared for possible market shifts in the coming weeks!
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