Bitcoin Bulls Falter Despite Gaining 14% In July


For the first time since mid-May, the pioneer cryptocurrency saw its price surge above the $40,000 mark over the weekend, but the rally started to falter on Sunday.

It topped $42,000 on Saturday, but by Monday morning, had fallen back to about the $40,000 price range on the FTX exchange.

Although bitcoin is essentially flat over the past five days, FTX data shows it has been up 14% month-to-date, and 38% year-to-date, despite being off by about 40% from its all-time high of around $65,000 in April.

Despite dropping below $30,000 on July 20, bitcoin has surged since then, partly because investors view it as a hedge against inflation and currency values if and when the Federal Reserve stops buying $120 billion in assets a month.

Bitcoin bears were not able to hold onto the lead in July as resistance levels fell and sentiment improved as the month drew to a close.

The perpetual funding rate has continued to trade negatively as an indicator of the directional bias of futures markets.

Accordingly, there is still a net bias against Bitcoin. In particular, this measure reveals that last week’s price rally may be connected to an overall short squeeze, with funding rates remaining at even more negative levels even after the price surged 30%.

On-chain activity and transaction volumes remain extraordinarily quiet compared to the volatility of spot and derivatives markets.

A 14-day median transaction volume of $5 Billion per day for Bitcoin is low based on entity-adjusted data. Despite the decline, $16 billion per day still remains a significant sum compared to what it was before the sell-off in May.



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