Bitcoin’s recovery is gaining momentum, delaying a strong start to July

Market conditions remain very bearish despite recent positive developments, so each rebound will be treated as a bear market recovery, rather than a trend reversal.

As analysts predicted for July based on historical data, Bitcoin is off to a strong start. The leading cryptocurrency has rebounded from its recent low of $57,700 to $64,000, a key and pivotal support level.

According to the latest weekly CryptoQuant a reportBitcoin’s recovery can be attributed to July’s positive seasonality and rebounding demand. These factors will likely contribute to a significant increase before the month runs out.

July is starting off strong, and Bitcoin is seeing a rebound

To substantiate these claims, CryptoQuant analysts cited previous data that showed that favorable monsoon winds were stronger in July during bear markets. July has become a reliable positive month for Bitcoin over the past decade. During previous bear cycles in 2018 and 2022, Bitcoin ended the month up 20% and 17%, respectively.

So far this month, Bitcoin has risen 11% from its lows of $57,700, and has traded above $64,000. The positive momentum seen in July usually occurs no matter how weak the broader market trend is. Since BTC entered July from bear market lows, there is a greater chance of further upside, thanks to positive seasonality.

Furthermore, overall demand for Bitcoin is recovering and moving back towards neutrality after its biggest contraction since 2022. Analysts noted a rebound in 30-day aggregate demand metrics after the index fell to -650,000 BTC in early June as the asset fell towards $58,000.

“It has since rebounded to near-neutral, with demand for speculative futures turning slightly positive while spot demand contracts are at their slowest pace since mid-May. A return to positive territory will confirm that the demand engine is reigniting,” analysts explained.

Stronger demand is still needed

Furthermore, investor demand in the US is improving, as seen in the Coinbase Premium Index, which recovered from deeply negative readings to -0.062. The recovery was supported by BTC’s rebound from the $57,000 level. This indicates that selling pressures on US trading platforms are declining and that institutional appetite is stabilizing.

Unfortunately, market conditions are still very poor bearish Despite these recent developments, as seen with the CryptoQuant Bull Score indicator hovering at 20, which is bearish territory. Although BTC has reached an undervalued zone in the short term and the price has the potential for a further recovery, stronger demand is needed.

You may also like:

In fact, the Bull Score needs a reading above 60 to achieve a sustainable rally. Until this happens, every bounce will be treated as a bear market recovery, rather than a trend reversal.